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I'm trying to add a cross dissolve effect in between two clips. Premiere doesn't allow me to do it between the first and the second clip.

Does anyone know the reason?

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Do your clips have overlap? If you put the clips end to end, running them right up to the end of the file and beginning of the file, then there is no video for Premiere to apply a dissolve to. You need to have sufficient video left in the clip to complete the transition.

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