In this paper, we propose a scalable video transmission system based on transcoding. First, we focus on the transcoder to reduce the bitrate of MPEG-2 bitstreams. We show that it is realized the layered coding by using the differential data between input and output of a transcoder. Next, we show the coding algorithm of this differential data. This algorithm can improve the coding efficiency by removing unnecessary code for differential data. By simulation experiments, we show that the proposed coding algorithm prevents the loss of coding efficiency in traditional hierachical coding, and show the effectiveness of proposed scheme.