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Controlling transparency in overlay images
Viewed in the Album, or in a graphics editor, an overlay image appears to have a solid background. When you place it on the title track, however, the background disappears, allowing the video to show through.
Studio uses the color of the top-left pixel of the image to determine which areas will be transparent. Pixels that match this color are not drawn when the image is rendered over video.
This scheme works well for still images that have consistent solid background colors. Sometimes, you may have to edit the top-left pixel of a bitmapped image to get the transparency effect you want. Any image-editing program even the Windows Paint accessory will do the job.
I use .tga images.
The automatic transparency feature applies to images that are imported into Studio via the Title Editor as well as those that are accessed through the Album.