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Kevin demonstrates how to make video files smaller to save space and easily insert them into PowerPoint presentations, upload to Discord, or attach to emails. He compares two videos, one using a highly efficient compression algorithm resulting in a smaller file size. To achieve this, he recommends using the free and open-source video transcoder called Handbrake, which also offers additional features such as cropping, resizing, and rotating videos. Handbrake can be accessed from the link in the description.