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I'm currently working on a project and I need to convert my original files to proxy files so that my less than adequate computer can handle the files while editing. My typical workflow is dump the files from my memory card onto an external hard drive, sort and name the files, copy the appropriate folders onto a flashdrive, create a new project in premiere on the flash drive, import the files into the project and then right click the files to create proxies. This normally works just fine, and worked for the first folder of files, but Media Encoder bugged out during the second folder and all of the files in the second and third folder "Failed" in Media Encoder's queue. I thought this was due to the fact that my computer may have timed out during this process and gone into sleep mode (Usually I monitor the entire conversion process but I couldn't stay the whole time so I plugged it into a power source and thought it would be good to go). Regardless, I deleted the "Proxy" folders that were created within the 2nd and 3rd folders and attempted to redo the process, only to have the files immediately "Fail" again in Media Encoder. I tried closing Premiere and Media Encoder and redoing it and the same thing happened. Does anybody know how to solve this issue? I have no way of editing these files without proxies and I'm on a tight deadline, so any solutions will be greatly appreciated! I'm not sure if this helps or not, but Premiere also keeps popping up an error message that says "An unknown error occurred while saving the project. Select 'Save As' from the File menu to save the project to a new location." if I've tried to create proxies using Media Encoder.
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I just had the same issue. My issue was that I had deleted the output folder where the proxies were being stored. So to fix I just had to repeat the process again but this time make sure that the files had an output folder.
Hope this helps (a year later).
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I have a batch of failed proxies too. I've identified all the fails are .movs I exported from Unity 3D, while the MP4s recorded on my Google Pixel and the .AVIs recorded on a Insta-360 Pro all succeeded. Maybe it is the file type for yours? (2.5 years later)