Imovie won't work properly

I am trying to use my MacBook's built in camera to record something on iMovie (I've done this before!)

When I click on the camera icon (on the bar along the middle of the iMovie page), the message which comes up makes no mention of 'record' or 'use isight camera', etc.. It only says that I have to plug in an external camera. (My built in isight camera works when I want to skype and if I were to use FaceTime. Any advice or suggestions?

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