Email is moving away from static content, the use of animated gifs, videos and dynamic images among other things is on the rise.
Embedding a full video within an email is not practical at the moment as the email file size would be too large and you would run into deliverability issues.
The most common solution is to host your video somewhere else and just have a screenshot of the first frame of the video in your email.

Knak Builder makes this easy to setup using the video content block.

Just drag the block in place and paste in your video URL 

Knak will automatically grab a screenshot of first frame of the video and overlay a play icon over the top.
You can edit to design and size of the play icon using the controls to the right of the screen.

Pro Tip - You don't have to always link to the start of a video, sometimes you might want to link to a certain part halfway through a longer video. Both Youtube and Vimeo allow you to do that by adding minute and second url parameters to the end of the video URL.
For YouTube, play your video to the part you want to link to, hit pause and then right click. You tube will automatically generate a url to the right place in the video.

For Vimeo, just add #t=1m2s to the end if your video link. That would start the video at 1 minute & 2 seconds.

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