Scalable video coding is used with peer to peer networks to minimize the upload bandwidth of peers and to reduce the effects of churn. We have formulated an NP complete optimization problem to describe the upload bandwidth at each peer. We proposed an approximation algorithm to solve this problem. Furthermore, seed servers are deployed in the network to overcome the upload bandwidth limitation at peers. Simulation results show that the proposed method provides good quality of service, increases diversity within the network and reduces the effects of churn.