What is an Alpha Channel?

Here is a quick definition:

In graphics, a portion of each pixel's data that is reserved for transparency information. 32-bit graphics systems contain four channels -- three 8-bit channels for red, green, and blue (RGB) and one 8-bit alpha channel. The alpha channel is really a mask -- it specifies how the pixel's colors should be merged with another pixel when the two are overlaid, one on top of the other. Typically, you wouldn't define the alpha channel on a pixel-by-pixel basis, but rather per object. Different parts of the object would have different levels of transparency depending on how much you wanted the background to show through. This allows you to create rectangular objects that appear as if they are irregular in shape -- you define the rectangular edges as transparent so that the background shows through. This is especially important for animation, where the background changes from one frame to the next.

Okay, so what does that mean to me? Alpha channel objects have a transparent background. Unlike green screen where you have to be careful not to have green halos and light your subject correctly, an alpha element has no background at all. Therefore nothing can bleed around the edges.
Many Non-linear editors support alpha channels, meaning an image with a transparent channel can be layered over another image with a crisp or even gradient edge and no halos. You can mix elements seamlessly and they look and blend naturally. Digital Juice products often have this channel.

MEP14+ supports still images with Alpha embedded, and will key alpha video elements with a separate alpha version of the file. The Digital Juice "Juicer" will make this separate file.

In major movies they shoot actors over a green or blue screen then take the movie into a computer and completely remove the background color replacing it with a transparent alpha channel. This is why Hollywood movies look so cool. The images bleed together perfectly.

With alpha channels you are able to composite multiple images together and blend them so they appear natural. You can create an image with a transparent background and use it in your NLE too. Photoshop™ and other programs will do this easily. LINK
In future episodes of Mastering Movie Edit Pro we will work with Alpha Channel elements.
You see alpha channels being used on TV all the time. Whenever you see a graphic across the bottom of the screen with a name or details, you are looking at an alpha channel element. The bar is 'keyed' over the video using alpha. This is called a Lower Third, because it is usually across the lower third of the screen. ESPN and other sports channels use them all the time. Often images of athletes and race cars are displayed in an overlay whereby the graphic is playing around or to the side of the video. The overlay has an alpha channel section that is transparent so the video will show through it.
Alpha channels will give you a lot of creative opportunities. Check out Digital Juice for products that have alpha channel support. Explore the use of alpha in your NLE. It will bring your videos to a whole new level!