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In this video tutorial, the presenter explains how to reduce file size for photos on an iPhone by changing the camera settings to capture photos and videos in high efficiency format. By accessing the camera settings in the settings application, users can choose between the most compatible (JPEG, H.264) and high efficiency formats. While high efficiency format reduces file size, it may slightly affect the image quality. The presenter recommends setting the camera to high efficiency format to save storage space on the device.