Video streams can be compressed to fit the available network by controlling three factors; temporal resolution, spatial resolution and picture quality. Controlling picture quality by modifying the quantization parameter (QP) is most widely used. But we demonstrate that reducing the spatial resolution is more effective in a low bit-rate environment, and we show how to find the optimal spatial resolution for the available bandwidth. Varying the spatial resolution is especially effective 1) when the bandwidth between the video encoder and the displaying device varies considerably with time, which is the case in wireless networks, and 2) when the display device is sensitive to energy saving. Both of these considerations are met by a portable media player which is displaying streaming video content transmitted by a remote video server through a wireless network. If the bit-rate is low, our technique can improve the picture quality by more than 1 db compared to adjustment of QP, accompanied by a halving of energy consumption.