—We consider the general scenario where content hosted by the server comprises streams and each peer can subscribe one or more streams. Multiple multicast trees are built to deliver the streams to respective peers while exploiting the overlap of their interests for efficient and scalable delivery. We propose an optimization framework for allocating server bandwidth to minimize distortion across the peer population. We apply the framework to a novel application, peer-to-peer (P2P) multicast live video streaming with virtual pan/tilt/zoom functionality. In this application, each user can watch arbitrary regions of a high-spatial-resolution scene yet the system exploits overlapping interests by building multicast trees. Experimental results indicate that optimal server bandwidth allocation enhances the delivered quality across the peer population.