I've been thinking about this issue, and here's where I've come down on the subject. A lot of times you hear people talking about how they circumvented the traditional system (by choice or by necessity), and then they trumpet their success, all the while mistaking its cause. They say, "I self-published and succeeded. Self-publishing is the path to success." Or, "I podcast my novel and succeeded. Podcasting in the path to success." Or, "I published my novel as an e-book and succeeded. Digital publishing is the path to success." Or whatever.
There are a problems with that logic, though, specifically in that there are some things it fails to recognize. And I think the main thing it fails to recognize is that the means of distribution is not the key to the success. For every success story that can be found in the realms of self-publishing, podcasting, etc. etc., there are thousands upon thousands of people who have tried the exact same path and failed. And failed miserably. Failed spectacularly.
The reason for the successes is because of three main things, two of which the author controls, one of which the author does not, and none of which are the means of distribution.
The first controllable factor is that the author wrote a good (or great) book to begin with. Just because an agent or editor rejects a book, does not mean it isn't a good one; sometimes editors (or agents) just get it wrong. The publishing industry is rife with stories that bear that fact out. But if an author has done their best work and believes in that work, they'll keep trying.
That brings us to the second controllable factor: that the authors of these books worked their assess off to promote them. There are so many books out there that it takes a tremendous amount of effort to get noticed, much less succeed. This is not news to anyone; you hear it all the time. But if you look at the story of the people who made it, you always hear them talk about how hard they worked, how many events they appeared at, how many signings and reading they set up, how many blogs they guest-posted on, etc. etc. etc. etc. ad infinitum. That effort, more than anything else, is the single biggest key to their success. I firmly believe that if an author who enjoyed success with podcasting their novel had put equal effort into self-publishing that same novel or releasing that same novel as an e-book (or whatever other means of distribution you care to name), they would have enjoyed comparable success. It's about the level of effort put into the book's promotion.
And for better or for worse, the third factor in determining success (or failure) is luck. Being in the right place at the right time has made or broken more careers than there is time to list. Of course, you increase your odds of being in the right place at the right time by being in as many places as possible as many times as possible (see previous paragraph on the subject of working your ass off), but in the end a little luck goes a long way. You can't control it, though, so stick with items one and two.
The last thing I want to mention is somewhat related to this topic and somewhat not. I've been hearing a lot of chatter about the potential demise of the traditional means of publishing and the revolution that's imminent. But before you dismiss traditional publishing, bear this in mind: The "success" of people who tried their hand at self-publishing or podcasting their novels is usually success in the very traditional medium they started out circumventing. They may not have arrived by conventional means, but they still arrived at the same place everyone else is angling for, for the same reason everyone is angling to get there: a good contract with a major publisher. Why? Because that's how you get you book into as many hands as possible. And because that's where the money is. And at the risk of having my membership revoked by the Brotherhood and Sisterhood of Fine Artists, that is still the kind of "success" we are all looking for. We want as many people to read and enjoy our books as possible, and we want to be paid well enough for it that we can afford to stay home (instead of going to a regular job) so we can do it again.
Anyway... I didn't mean for this to turn into a PhD dissertation, I just wanted to say that getting as many people as possible to read your book is a good way to get noticed by a major publisher, but I think it is a mistake to confuse the means of distribution (podcasting, self publishing, whatever) for the cause of success in achieving wide distribution.