I seriously doubt this has anything to do with your compressed files and instead, everything to do with your ISP. We have videos that are over 100MB and we almost never get reports of problems.

Doing a quick traceroute, it looks like your ISP is reselling Internap/pnap.net. From what I could see, it looks like there's a routing problem between Internap where they peer (connect) with AT&T, who supplies much of the west coast-bound connections for Comcast, which is the big cable ISP in norcal.

You probably don't need a faster server, but you might need either a faster connection to your network (100Mbit if your current server has less than that) or a bigger bandwidth connection (you might be limited to 3, 5 or 10 Mbits, which wouldn't be enough for video if you have more than a few members.)

I'd say check with Luke/Chilihost/National Net or, if you have someone willing to do your own admin/update of your server, check out SoftLayer or ThePlanet.