New York-based Animoto, a five-year-old slideshow service that makes awesome-sauce out of images and video clips, has used some of its $25 million in recent funding to make the mobile editing process a whole lot easier.

In the newly released mobile version of its Web app, Animoto helps users auto-produce slideshows from the images on their iPhones, adding transitions, effects and theme music to selected pictures from the device’s camera roll.

The app takes the idea of “nonlinear” one step further, by displaying selected images and theme and music options in tile format on the app’s interface, for one-tap selection. While users can’t select a song from, say, their iTunes or Amazon music accounts, Animoto offers 500 royalty-free music options, and there are five themes — including holiday and celebration styles — to choose from. The slideshow is stiched together based on the beat of the chosen music, and it takes about 15 seconds to produce a 30-second video, provided there’s good Wi-Fi and data connectivity on the phone. Then, users can share their videos via email, text message or through Twitter and Facebook.

One of the biggest drawbacks of the Animoto app is that it only works with still images, not video clips. For basic slideshow videos, this works fine, but lots of consumers would probably like the ability to throw their video clips into the mix.

Animoto CEO Brad Jefferson says the company wanted to focus first on getting the picture-slideshow capabilities of the app right; he pointed out that users can use Animoto’s Web app to make polished packages out of both photos and videos. Animoto charges $5 to $30 a month for extended video projects; videos 30 seconds or less can be created for free on both the Web site and the iPhone app.

The Animoto video-editing app is currently only available for the iPhone; it is not optimized for use on the iPad.

If the Animoto app isn’t what animates you, there are other video apps out there that will help you auto-tune your mobile video-making. VidRhythm, created by Harmonix, makers of the popular Rock Band videogame franchise, costs $1.99 and includes 20 pre-downloaded songs to help transform everyday videos into music videos. Magisto, which in September received funding from investor Li Ka-Shing, will launch a video-making app in January at the Consumer Electronics Show; Magisto says its app begins to process users’ video clips as they are capturing them on their smartphones, making the mobile post-production process even faster.

And there’s always Apple’s $4.99 iMovie app for iPhone, but that app requires a little more manual editing on the part of the user.

Jefferson says that Animoto is looking to offer a more personal video-making experience that will set it apart from music-video and mash-up apps. He predicts that an increasing number of Animoto videos will be made on its iPhone app, as consumers become increasingly mobile. Some 800,000 videos were made on the Animoto Web site last month, according to Jefferson, and approximately 15 percent of those were viewed on mobile devices.

Animoto also offers a professional-grade video editing program for $249, which contributes to a significant portion of the company’s revenue.

At their height, music-related games generated an estimated $1.7 billion in revenues in 2008. Families all over America were rocking out in their living rooms with plastic guitars and drum sets to everyone from the Beatles to Aerosmith.

But less than three years later, the leaders in the space were canceling new products and slashing production.

In late 2010, slowing sales of Rock Band led Viacom to sell maker Harmonix and close the MTV Games publishing division, and a few months later, Activision Blizzard canceled Guitar Hero.

The book, called “Music Games Rock: Rhythm Gaming’s Greatest Hits of All Time,” is by Scott Steinberg and is available via download for a number of e-readers at www.MusicGamesRock.com. It is free on the Web, or costs $2.99 for the Kindle.

Steinberg is the CEO of TechSavvy Global, a technology and video game consulting firm, and previously wrote the book “Get Rich Playing Games.”

I had a hunch that Viacom sold off Harmonix, which makes the Rock Band games, at a steep discount last month. But I’m still surprised it was this cheap: I’m told that investment group Columbus Nova paid $49.99–the list price for “Rock Band 3″–and got the entire company.

There’s more to the story, of course: People familiar with the transaction tell me Harmonix’s buyers also assumed the game company’s liabilities. That includes expensive music rights fees, and responsibility for lots of unsold games and equipment sitting on warehouse shelves.

And I’m told that the deal is structured in a way that will let Viacom net something like $150 million in tax benefits, similar to the AOL/Bebo fire sale last year. Given that Viacom paid $175 million for Harmonix a few years ago, things could be worse.

[UPDATE: The Los Angeles Times reports that Viacom will actually receive a $50 million tax benefit, and offload $100 million in liabilities. That makes more sense, and I've since confirmed it myself. My apology for the error.]

Still, it’s a fire sale price no matter how you look at it. And that can’t be comforting to Harmonix’s remaining employees, who are likely going to be facing a very serious restructuring.

Columbus Nova’s PR reps wouldn’t comment on the sale terms (neither would Viacom) but pointed me to an earlier statement from the company, which said it was “really excited about backing the world-class team that has consistently produced such great games and helping them grow the company and its brands.”

The cable programming giant has sold its Harmonix unit, which published the game, to investment fund Columbus Nova LLC. It hasn’t disclosed a price, and if it’s not material it won’t have to. And my guess is that it won’t: Viacom bought the games business for $175 million in 2006, when the games were on the upswing, and if I had to bet, I’d say it will end up selling it for less.

Let’s take a minute here to point out something obvious, but which we always seem to forget–media consumption trends move very, very fast. You only have to go back two years to find Warner Music Group’s Edgar Bronfman Jr. demanding that the music labels get their fair share of the “enormous opportunity” the games were creating.

And just a year ago, (some) people were convinced that a special Beatles version of Rock Band was going to be a very, very big deal.

Now gamers are on to something new: Microsoft’s Kinect, for instance, seems to be selling very well this month. But I wouldn’t bet on it staying hot a couple of years from now.

The New York-based entertainment company is preparing to unload its Harmonix videogame division, maker of the popular “Rock Band” line of games.

Viacom on Thursday reported profit for the latest quarter fell 59 percent after it took $260 million in write-downs related to Harmonix, which has long been a drag on the bottom line.

Harmonix has been on the block since September, and Viacom is now in deal talks with both videogame companies and private-equity firms, according to people familiar with the matter. Viacom is expected to hold an auction, and as many as four companies might participate, one of those people said.

Viacom bought Harmonix in 2006 for $175 million, and made an additional $150 million payment in 2008 as part of the deal. But for much of that time the unit has been locked in brutal competition with rival game “Guitar Hero,” from Activision Blizzard Inc., which is roughly 60 percent-owned by Vivendi SA.

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