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First you have to differentiate video effects from video transitions and color grading. Then you will know you apply video effects to increase viewers interest and enjoyment.
To Fix Footage Problems / To Match different Footages Together
It Attract the User to View Video ForceFully
Video effect most probably apply for getting concentration of the viewer
Reasons there are a lot but, normally an effect helps you to make a video this personal sign, this special touch by the edition. This is like everything is very personal and subjective. I use in my videos a video filter: my mark although is convenient not abuse of them, I use effects in an interview or any part of video that’s boring it seems more faster.
Helps if you need your film in a certain mood
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