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In this video tutorial, the presenter demonstrates the difference between an uncompressed image (46MB) and a compressed JPEG image (4.1MB) to show how images can be compressed to just a tenth of their original file size without losing quality. The significance of the JPEG algorithm is highlighted, as it is widely used for digital images from phones and cameras. Additionally, the prevalence of JPEG images (86%) and the importance of video compression algorithms like h.264 are discussed.