A constrained variable rate coding technique limits the number of bits used in an encoding process. A quality setting indicates a maximum level of quality to be used in the encoding process which limits the number of bits used in the encoding process. A bandwidth reclamation factor which indicates an amount of bandwidth to conserve may also be used with the quality setting. The constrained variable rate coding technique using a lower quality encoding process for less complex video data and a higher quality encoding technique for higher quality video data.