External compositing is a legacy compositing mode which allows you to do the compositing downstream.
Learn more about the different Compositing modes
Looking for how to Configure using an external keyer
Setup
In Director
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Add 2 Media outputs in the routing panel
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Change the Output type of the 2nd output to "Key"
In Editor
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Go to Pixotope World Settings
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Change the Compositing Mode to "External"
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Make sure to not have separate Video Outputs set up! Using External compositing together with General > Video Outputs can bring unexpected results.