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Kevin demonstrates how to make video files smaller for easier sharing, such as embedding in PowerPoint or emailing. He shows two videos, one highly compressed, taking up 63MB versus one using a more efficient compression algorithm, taking up 167MB. Kevin recommends using Handbrake, a free video transcoder software, to reduce file size and perform other editing tasks on your videos. Handbrake can help with cropping, resizing, rotating videos, and more. Download link provided in the video description.