I have been trying to create a video template which uses alpha channel video overlayed on the mp4 videos and images.
This is how I need to create a video http://view
You mention that you have looked at AVAnimator, did you download the KittyBoom example project and try it out? The specifics of how it works are detailed in this post. One thing to note is that when you build and run on the device, you need to turn Debug mode off otherwise it will not execute quickly because a number of extra checks are done in debug mode. Also, you have to make sure to test on the actual device, the simulator is not a good measure of performance on a real device. Performance is a key problem with video that contains an alpha channel as iOS does not support video with an alpha channel by default.