What you are looking for is stream compression approach. Good news is you have quite a lot of options. Please also note you have to think about memory because some solutions (dictionary-based) might require a lot of memory, so test and tune. 
In order to keep my answer short I would suggest to give LZ4 a try.
LZ4 - http://code.google.com/p/lz4/
LZ4 is a very fast lossless compression algorithm, providing
  compression speed at 300 MB/s per core, scalable with multi-cores CPU.
  It also features an extremely fast decoder, with speed in GB/s per
  core, typically reaching RAM speed limits on multi-core systems.
Benchmark: 
Name            Ratio  C.speed D.speed
                        MB/s    MB/s
LZ4 (r97)       2.084    410    1810
LZO 2.06        2.106    409     600
QuickLZ 1.5.1b6 2.237    373     420
Snappy 1.1.0    2.091    323    1070
LZF             2.077    270     570
zlib 1.2.8 -1   2.730     65     280
LZ4 HC (r97)    2.720     25    2040
zlib 1.2.8 -6   3.099     21     300
There are a lot of implementations available, please check: http://code.google.com/p/lz4/
LZO -  http://lzo-net.sourceforge.net/
LZO.Net brings the power of Markus "FXJ" Oberhumer's great LZO
  compression library (V1.08) to .Net. It wraps the access to the native
  DLL with a small C# class maintaining the raw speed of the ANSI-C
  library.
Snappy - https://code.google.com/p/snappy/
Snappy is a compression/decompression library. It does not aim for
  maximum compression, or compatibility with any other compression
  library; instead, it aims for very high speeds and reasonable
  compression.
Two C# native implementations are available:
QuickLZ - http://www.quicklz.com/
QuickLZ is the world's fastest compression library, reaching 308
  Mbyte/s per core. It can be used under a commercial license if such
  has been acquired or under GPL 1, 2 or 3 where anything released into
  public must be open source.
Native implementations - QuickLZ C#
So far, only a subset of the library has been ported, 
namely the setting:
QLZ_COMPRESSION_LEVEL = 1 or 3 
QLZ_STREAMING_BUFFER = 0 
QLZ_MEMORY_SAFE = 0