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This video tutorial demonstrates how to compress file size using WinRAR, a widely used compression software. Compressing files has advantages such as easier uploading and faster data transfer. The video instructs viewers to select the folder, right-click, and click "Add to Archive" to compress the file. By following the settings on the screen, the file size is reduced from 415MB to 220MB. Highly compressing files is beneficial for efficient storage and transfer.