I shoot video with a Canon VIXIA HF G20 at 1920x1080. The camera generates AVCHD files with a file extension of .MTS. I need to edit the AVCHD MTS in Sony Movie Studio 13, which supposedly supports importing from AVCHD camcorder with USB 2.0 connection. Within Movie Studio 13, however, when I preview my clips on the timeline, the quality is terrible, make editing impossible. Apparently this is a common problem with MTS and Sony Movie Studio.

Searching high and low, I got some clues. To import and play AVCHD MTS files in Sony Movie Studio flawlessly, we really have two options:

1) Get a much more powerful computer
2) Convert the MTS files to something less compressed like MPEG-2, AVI for Sony Movie Studio

Personally, I now would choose the second way and to get the work done, a MTS converter seems to be necessary. After trying 3+ MTS converter software on the market, I highly recommend Brorsoft MTS/M2TS Converter to convert MTS files to Sony Movie Studio 13/12/11 compatible format without loosing quality.

The program is an easy-to-use AVCHD MTS converter for users, which can help you transcode MTS/M2TS into a different format like MPEG-2 with least quality loss. You should then be able to import the new file into Sony Movie Studio with smooth editing without any trouble. It will ensure a perfect MTS file importing, playing and editing workflow with Sony Movie Studio. Besides, this program can also enable you to effortlessly encode/re-encode AVCHD footage shot by Panasonic, Canon, JVC, Sony cameras for smoothly importing and editing in Pinnacle Studio 12/1314/15/16, Adobe Premiere Pro, Sony Vegas, Cyberlink PowerDirector, Avid Studio, Magix Movie Edit Pro, Windows Movie Maker and more NLEs(Get more AVCHD MTS/M2TS Editing Tips).

Converting MTS files to Sony Movie Studio

Step 1: Add MTS video files

Install and launch the MTS to Sony Movie Studio converter and load source clips to it.

Step 2: Choose output format

Click “Format” bar and choose "Adobe Premiere/Sony Vegas > MPEG-2 (*.mpg)” as output format on the drop-down menu.

Tip – Profile Settings:
In case the default settings do not fit your requirement, you can click “Settings” button and enter “Profile Settings” panel to adjust video size, bit rate, frame rate, sample rate and audio channels.

Step 3: Start MTS to Movie Studio conversion

Click the convert button, it will start converting MTS for importing to Sony Movie Studio immediately. When the conversion task is finished, click “Open” button to get the exported files and then import the converted MTS into Sony Movie Studio for editing beautifully.

Source: How to Get Sony Movie Studio to work with AVCHD MTS
http://format-changes.over-blog.com/2015/07/editing-sony-canon-panasonic-mts-files-in-sony-movie-studio.html