Existing media providers such as YouTube and Hulu deliver videos by turning it into a progressive download. This can result in frequent video freezes under varying network dynamics. In this paper, we present CloudStream: a cloud-based video proxy that can deliver high-quality streaming videos by transcoding the original video in real time to a scalable codec which allows streaming adaptation to network dynamics. The key is a multi-level transcoding parallelization framework with two mapping options (Hallsh-based Mapping and Lateness-first Mapping) that optimize transcoding speed and reduce the transcoding jitters while preserving the encoded video quality. We evaluate the performance of CloudStream on our campus cloud testbed.