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I want to add a png image while recording video using camera api, the image must acts as a watermark on the video while video is saved.

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One approach which I can suggest is use ffmpeg for android (check this).
You will need to compile the library yourself, if you want the latest version.
Readily available ffmpeg for android is this. After implementing the ffmpeg, refer this question for adding watermark. Hope this helps.

Nakul
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