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In this video tutorial, the process of compressing file size using WinRAR is demonstrated. Compressing files has advantages such as easy uploading and faster data transfer. The tutorial guides viewers through the steps of selecting the folder, right-clicking, and using the "Add to Archive" option. By following the settings on the screen, the file size is reduced from 415MB to 220MB. WinRAR is recommended as the best compression software to use for this purpose.