If you're talking about providing a high capacity and quality experience then there's no alternative to colo.

I think the /Mbps prices quoted are a bit on the high side (you can get cheap transit at 5GBP/Mbps if you deal in reasonable commits). Apart from dropping your own line in there's no cheaper way I know of to achieve the quality.

Use of a CDN would allow less capital outlay on the standard http hosting (could use dedis, vm, cloud) and somewhat instant scalability. Once you know your traffic patterns your implementation options sometimes get made for you.