Most people bounce out to Photoshop or Canva for thumbnails, but you can build a great one right inside Final Cut Pro. Here's my full process, from frame to export.
Step 1: Set up a 720p project
Create a new project and set it to 720p. That gives you 1280 x 720, which is exactly what YouTube wants for a custom thumbnail, so your export is good to go.
Step 2: Grab a hold frame and cut yourself out
Since your footage is a video, pick the frame of yourself you want and press Shift H to make a hold frame, now it's a still you can drag out. (If you shot in LOG like I usually do, throw a conversion LUT on first.) Then head to your effects and grab Draw Mask, think of it like scissors. Zoom in and click points to outline yourself (hold and drag while clicking to make a curved point, the farther you drag the broader the curve), connect the points, and use the feather slider to soften the edges.
Step 3: Color grade yourself to pop
Open your color curves and make an S-curve for contrast, then crank your highlights and midtones since you want to stand out (just don't push so far it looks unnatural). Head to your color wheels, bump the global saturation, and add a little teal into your shadows and orange into your highlights. Finish with the Sharpen effect for definition, I go around 4.0, and honestly never go above 10, that effect is way stronger than it needs to be.
Step 4: Add and shape a background
Drop a screenshot or whatever image you want behind you, underneath your cutout. I like to use the distort tool to make one side larger so it looks angled, then add a bit of gaussian blur so it sits back behind you.
Step 5: Add a glow around yourself
Hold Option and drag your cutout down to duplicate it, bump its size up slightly, then add Colorize from your effects and pick your colors. Add a Gaussian blur and push the amount and blur boost up, and if the color washed out, open color wheels to bring the saturation and brightness back. Adjust the opacity to taste. For a clean outline you can add a light stroke, my buddy Dylan Bates (The Final Cut Bro) made a plugin that brings Apple Motion's tools into Final Cut, including a stroke effect, set it to "outside" and adjust the color and width.
Step 6: Bring in logos and graphics
Any time you want a logo or a cut-out-looking graphic, grab the .png version online. Drop it in, press Shift T for the transform tool to position it, use distort to shape it like it's flying a certain way, and rotate it with the transform tool. Add Directional Blur from your effects for some motion, then drag to set the intensity and direction. Want it to glow too? Option-drag to duplicate, turn off the directional blur, and add Colorize and a gaussian blur just like you did on yourself. Quick tip: copy the effects on one clip with Command C and paste them onto the next with Command Shift V so you're not rebuilding it every time.
Step 7: The little details
For a logo in your hands, scale it into position and use Draw Mask again to cut out around your fingers (tip: press V to temporarily disable the clip so you can see what you're outlining, then invert and feather). And for the piece de resistance, drop a tiny logo into your eye like a reflection, then Option-drag it over to the other eye. At small thumbnail sizes, full opacity usually looks just fine.
Step 8: Export the frame
When you're done, go to File → Share → Save Current Frame, jump into settings and make sure it's set to JPEG, hit next, save it wherever you want, and you're done.
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