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I have a short clip that I shot in front of a green screen and I was able to successfully insert an image behind it. The problem is that the Video and the inmage don't fade in and out at the same rate
I've made an example of the behavior.
Thanks,
Pat
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Try nesting the green screen clips and put the fade on the nest.
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Take your sequence with both clips (without fading effect) and put this sequence into another new sequence.
When you nest the sequence, it becomes one clip and it should be easier to make it fade together.