A Transcoding Rule identifies a web browser or a DLNA device and map that device to one or more Transcoding Profiles (See below). Devices can be identified with a range of parameters:
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the HTTP User Agent sent by the browser/device when it requests media from iHomeServer
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a custom HTTP header
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the browser/device's IP address
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if the device is a DLNA client, then it's DLNA Friendly Name (if the device broadcasts itself as a DLNA Renderer device)
Transcoding Rules are configured by clicking the 'Edit' button next to 'Enable Transcoding Rules' within either the Network or DLNA tab of the iHomeServer Settings window: