Making a PNG is the way to go.
For a custom frame, it's very versatile.
You can be very creative with frames.
Let's say you have a photo of a lovely lady, and you wish to have a custom frame surround the image.
Using Paint.net or Elements, you can cut out her image completely,tracing her, and place her on a transparent background. Now, if you place that image into the timeline, then add a border, the border will follow her outline.
But...alternatively
when first cutting/tracing her image, you can cut her image anywhere you like, shape of a puzzle piece, or flower, whatever.
When placed on a transparent background, then placed in the timeline, then add a border, you see again the border follows your cutlines, making the shape you chose. This can add infinite choices of frames if the inluded PD frames are unsuitable.
Sounds like work, but it's not, really.
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