sudo pacman -S mplayer
If you use Ubuntu or other Debian-based distro, the command to install mplayer will be:
sudo apt-get install mplayer
Now, to watch videos in the terminal, you just need to open the terminal and run this command:
mplayer -vo caca /path/to/the/video
If you just need to watch in black and white mode, then the command will be:
mplayer -vo aa /path/to/the/video
Note: unfortunately, the video quality is not really good, you will only see the video being played in ASII mode.