Video streaming is gaining more and more popularity due to video based applications, and due to heterogeneous networking environment,a codec is needed that can facilitate every user according to his requirement which should be user friendly also. So by using H.264 video compression standard, we have developed a scalable video codec for such networking conditions. Purpose of choosing H.264 for compression is its ability to compress the video at a rate twice than previous standards while maintaining the quality of video. The main idea is to achieve compression, maintaining the quality and integrity of video. Scalability is achieved in such a way that video is encoded just once decoded but it can be decoded multiple times according to the requirement of user. All the three modes of scalable codec are covered and implemented; temporal, spatial and quality scalability with better results. In temporal scalability, scalability is achieved by varying the frame rate, in spatial; by varying the resolution and in quality by varying the bit rate of the input video. All the three modes split the video into different layers and then scalable codec is applied over them. Scalable codec is tested over different videos and better results are obtained in terms of scalability and compression.