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I have a one single video file captured by GoPro camera having 1 hour of duration. I would like to make sub-clips out of it from here and there for about 15-30 seconds.

First I can open a source clip in the preview window and use the In and Out points to choose just the part of the clip and export them as individual sub-clips in mp4 files. Then I can import these sub clips back to the timeline for combining them. I have seen some pros doing this (GoPro Media Proffessionals) and some products which only does this, but I'm a little worried about the quality, because I will be rendering/encoding for twice the same clip, which I may encounter a loss of quality. (I assume using a lossy codec)

Indeed, I used to open the source clip in the preview window and use the In and Out points to choose just the part of the clip and then assemble clips together in the timeline without exporting them.

My question is what should I do for the best results? If I need to export sub clips which video codec should I use?

I'm using Adobe Creative Cloud, with GoPro Sudio as a footnote.

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I've never used GoPro Studio, but there's no reason you should have to export out the sub-clips individually to use them in your timeline. It may make sense for you to do that if you want to send the individual files to other editors, but even then, you could just send the raw footage with the project file. Another reason could be if you only wanted to work with a few minutes of the footage. You could export out a sub-clip of what you will work on so that you don't have to work with such a large file. However, if you are taking sub-clips from many different spots in the raw file, just work with sub-clips of the raw file in your timeline.

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