Automatic video transcoding

Hi guys, I'm hoping you guys can help me. I'm looking for some software that once a video file is transferred to a certain folder that it can automatically transcode to a smaller file. Here's the catch; it has to be open source or freeware as this is for a business who won't pay for software lol. It can't require any user input after it's initially setup. Thanks guys!

You could use ffmpeg in script that watches for new files.