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To those with H.264 playback woes…
After much struggling I think I have found a nifty little workaround for the playback/timeline stuttering that many of us have been getting with H.264/.mts footage in Premiere. I noticed that the places in my timeline where I was having problems were the yellow line spots so I thought, “Hey, what if I…” and I did this.
I created a new title, left it empty, dropped it on the timeline above all my footage (in a new track if needed) and I stretched it out to overlap the whole timeline. Then I hit return to render previews. To my amazement everything played back fine! The empty title, which doesn’t seem to have any effect on the video since there is nothing in it, tricks Premiere in to rendering all the footage that it may otherwise skip (giving it the yellow line above it).
This seems like a clunky way to work but it seems to work for me. Maybe others can find it useful as well.