Automated video-editing app Magisto now lets you add photos in with short clips so users can create better short movies to share with families.

Magisto works like this: You take some clips with your phone, open Magisto, select clips you want edited into one movie, and the iPhone or Android app uses an algorithm to make a short clip that seamlessly combines everything together with music. Now the app will be able to add pictures to the video-editing process, which opens up the app to more uses and different kinds of projects.

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“User photos can add to the emotional impact Magisto already provides,” Magisto CEO Oren Boiman told VentureBeat. “It differentiates itself from a boring slideshow, and it can be much more dynamic.”

Magisto is using the South-by-Southwest conference to show off the new photo capabilities of its app, and has partnered with the Austin Chronicle to tell stories from SXSW using the app.

Magisto attracts 3 million unique users each month and has 5 million registered users overall on the service, which has only been live a little more than a year. Boiman said the app has been helped by being featured in the Google Play app store and by placement inside Samsung’s S Suggest app that recommends apps for Android phones. He also claims word-of-mouth has been significant because even on weeks without being featured anywhere, usage and sign-ups steadily ticked upwards. Tennis pro Maria Sharapova even shared a Magisto clip on Facebook.

Eventually, Boiman would like to expand the scope of Magisto by doing just slideshows without video clips. But he said a Magisto slideshow would not be similar to the one provided by popular app Animoto, and that a Magisto slideshow would need to provide an “emotional experience.”

New York City and Tel Aviv-based Magisto received $5.5 million in second-round funding in Sept. 2011 following an undisclosed first round. Hong Kong investor Li Ka-shing’s Horizon Ventures led the second round, with participation from prior investor Magma Venture Partners.

Boy with camera via greggsphoto/Shutterstock