Best solution to transcode mp3s (lower bitrate) and stream on the fly

I have a large repo of mp3s on my LAMP server (I think it's a Debian VPS now) and currently I use a crude flash based mp3 player that "streams" the mp3s directly from my server. I am implementing an HTML5 player but I feel this is a similar to my flash integration (and this is slightly besides the point of this question)

This question is about how I should start molding my delivery to limit bandwidth - connection speed isn't entirely an issue (although should be reason开发者_运维技巧able) but my bandwidth costs are flying now and I need to take measures to limit stream quality (transcode down to 128)

Ideally I'd like to avoid RTMP so I can use my shiny new soundmanager2(html5) plugin for mobile etc, and as such I've been looking into this article here - http://www.metabrew.com/article/transcoding-http-mp3-streaming-proxy-in-bash which details how to create a proxy to on-the-fly transcode bitrate and serve new files.

I am fairly new to this arena and am open to all solutions! Thanks!

P.S I am open to 3rd party services - affordable ones at least :)

Possible Solutions (on SO)

• reduce bandwidth streaming mp3s php