In recent years, real-time video communication over the internet has been widely utilized for applications like video conferencing. Streaming live video over heterogeneous IP networks, including wireless networks, requires video coding algorithms that can support various levels of quality in order to adapt to the network end-to-end bandwidth and transmitter/receiver resources. In this work, a scalable video coding and compression algorithm based on the Contourlet Transform is proposed. The algorithm allows for multiple levels of detail, without re-encoding the video frames, by just dropping the encoded information referring to higher resolution than needed. Compression is achieved by means of lossy and lossless methods, as well as variable bit rate encoding schemes. Furthermore, due to the transformation utilized, it does not suffer from blocking artifacts that occur with many widely adopted compression algorithms. Another highly advantageous characteristic of the algorithm is the suppression of noise induced by low-quality sensors usually encountered in web-cameras, due to the manipulation of the transform coefficients at the compression stage. The proposed algorithm is designed to introduce minimal coding delay, thus achieving real-time performance. Performance is enhanced by utilizing the vast computational capabilities of modern GPUs, providing satisfactory encoding and decoding times at relatively low cost. These characteristics make this method suitable for applications like video-conferencing that demand real-time performance, along with the highest visual quality possible for each user. Through the presented performance and quality evaluation of the algorithm, experimental results show that the proposed algorithm achieves better or comparable visual quality relative to other compression and encoding methods tested, while maintaining a satisfactory compression ratio. Especially at low bitrates, it provides more human-eye friendly images compared to algorithms utilizing block-based coding, like the MPEG family, as it introduces fuzziness and blurring instead of artificial block artifacts.