You need to send the contents of the webcam as a video stream, not a series of images. I would recommend H264 as the compact and most common video codec used on the Internet today. However, encoding, streaming, receiving and displaying video is not easy. There are many open source projects that can help, for example, X264 and VLC, but it is definitely much more complicated than capturing jpg and sending them. It would be much easier to use an existing video chat component that supports webcams.
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