What’s the best way to use video on a website?

The other day a very clever man who founded and runs an authoring tool company showed me around his most excellent product. Chatting afterward he remarked that while he was aware it’s accepted wisdom that having a video on your website is a “good thing” he’d never understood how it could work for him.  After all, his product does pretty much the same thing as all his competitors’ products, so is there really much benefit to running through the features with voice-over, screen grabs and the like? 

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