Accessing multimedia services via fixed and wireless networks has become common practice. These services are typically much more sensitive to packet loss, delay and/or congestion than traditional services. In particular, multimedia data is often time critical and, as a result, network issues are not well tolerated and significantly deteriorate the user’s Quality of Experience (QoE). Therefore, the authors propose a QoE optimization platform that is able to mitigate problems that might occur at any location in the delivery path from service provider to customer. More specifically, the distributed architecture supports overlay routing to circumvent erratic parts of the network core. In addition, it comprises proxy components that realize last mile optimization through automatic bandwidth management and the application of processing on multimedia flows. This paper introduces a transcoding service for this proxy component which enables the transformation of H.264/AVC video flows to an arbitrary bitrate. Through representative experimental results, the authors illustrate how this addition enhances the QoE optimization capabilities of the proposed platform by allowing the proxy component to compute more flexible and effective bandwidth distributions.