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Kevin demonstrates how to make video files smaller to save space, making them suitable for use in PowerPoint presentations, Discord, or email attachments. By using a compression algorithm, he shows how videos can be reduced in size from 167MB to 63MB. He recommends using Handbrake, a free video transcoder, to achieve this, as well as to crop, resize, or rotate videos. Handbrake offers a range of features beyond just compressing videos.