High resolution digital imaging sensors are becoming more widespread. The challenges in delivering this high resolution content to the client are posed by limited resolution of display panels and/or limited bit-rate for communications. We propose a video coding scheme which enables virtual pan/tilt/zoom functionality during the streaming session. This way the server can adapt and stream only those regions of the video content that are desired at that time at the client's end. Apart from generating a multi-resolution representation, our coding scheme uses P slices from H.264/AVC for random access to arbitrary regions within every spatial resolution. We study the trade-off in the choice of slice size. A larger slice size enables higher coding efficiency for representing the entire scene but increases the pixel overhead. The pixel overhead is due to superfluous pixels that are transmitted but not displayed at the client's end. The optimal slice size achieves the best trade-off and minimizes the expected number of bits transmitted to the client per frame. Our analysis helps to predict the optimal slice size, which depends on the signal as well as the display resolution. Experimental results confirm the optimality of the predicted slice size for various test cases.