I don’t think AVI can be compressed as it is a loseless format.
Here are some links to this very topic
Another from the same site.
In case you seek a program that is free, not just free but free from malware, spyware, and other crud-ware that can convert, and offer tons of possible options for compression. I would try a program called SUPER it is by eRightSoft.
This is a very powerful program, it is nothing short of amazing I think.
The page you land on takes you through some of the programs features. It has so many they need to do this.
But, if you want for now skip to the bottom most of the page. Here find the link to: Start Downloading SUPER ©
The next page takes you through even more features of this FREE program. Yes, it has tons of nice features.
On this page the link is right at the top. It should be light blue and maybe underlined. It says: download and use
Stay with me here. This is the last page. Oh, they designed this so no direct link is possible that I can find. They really want you to know about all these features.
The third and last page for this, the link is on the bottom and yes it is the actual file link this time.
Keep ALL these pages in mind when you open the program and get lost asking “Now What?” These three pages will be the key to showing you how it all works. See the madness to the method?
This last link states: Download SUPER © setup file
Phew, that is always a tough one to post as it is rather involved to get to the actual download link.
But, for a free powerful program like this, I think it is well worthy of the trouble. It may offer the AVI compression you seek. I have never used it for that before. It may be worth checking out in the three feature filled pages before downloading.