With the increase of broadband popularity, the web has become a serious means of getting people to see your work. Although the speed at which people access the Internet is increasing, it is still limited. As a result, the limitations of the Internet require making compromises. Understanding the limitations of web video and the compromises that must be made, is the key to publishing successfully over the web. The Big deal.
Nobody looks forward to waiting in line or waiting for a movie to download, it pisses people off.
Unless you are the late Andy Kaufman, you don't want to have your film performed in front of a pissed off audience. Video compression takes a raw video file and reduces it to a smaller size. However, as a result of compressing the size of the video, the quality of the video will be reduced. Your job, then, is to decide how much video quality can be sacrificed, without losing the meaning of your film. As a general rule, the smaller the movie's file size is, the shittier the quality will be.