gistfile1.rb

# lib/hydra/derivatives/psu_video.rb
# This class must live in the Hydra::Derivatives namespace
    class Hydra::Derivatives::PsuVideo < Hydra::Derivatives::Video
      def codecs(format)

        case format

        when 'mp4'
          "-vcodec libx264 -acodec libflaac"

        when 'webm'

          "-acodec libvorbis"
        else

          raise ArgumentError, "Unknown format `#{format}'"

        end
      end

    end

# Then in the make_derivatives block you say to use that processor:


        makes_derivatives do |obj| 
          case obj.mime_type
          ...
          when 'video/avi'
            obj.transform_datastream :content, 
              { :webm => {format: "webm", datastream: 'webm'}, 
                :mp4 => {format: "mp4", datastream: 'mp4'} }, 
              processor: :psu_video
          ...
          end
        end