There are so many different approaches to distribution out there now that the conventional theatrical or home video release are only a couple of the options.
A former screenwriting student of mine, and some of his fellow Drexel film school grads, formed the filmmaking collective Sweat Robot and just released their first film, "Happy Birthday Harris Malden" straight to iTunes and Amazon for download after making some festival appearances to get the word out. It seems to be working out okay -- plus it's a really good film.
http://www.indietalk.com/showthread.php?p=80404
There are something like 4000 indie films made in the U.S, each year, of which 100-200 might get distributed and, even then, what distribution means is relative because some companies will promote the hell out of a film, full page ads in the trades and others just manage to do what they can.
From our perspective, the actors and the filmmakers, we should just keep trying to make the best films possible and hope that it matches the needs of a distributor who can, in return do it justice.
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