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What Drove Media Industry Gains Since Last Dow Record

Walt Disney World in Orlando, Fla.
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Walt Disney World in Orlando, Fla.

Traditional media stocks have been on quite a run into the Dow Jones' rise towards hitting the intraday peak of 14,198, with the five biggest media giants hitting new highs.

Driving the media industry's gains: growing advertising revenue, and the fact that digital distribution revenue is proving accretive, rather than cannibalizing revenue from cable distribution.

Of the traditional media players, Disney is the best performer, with its stock up more than 58 percent since the market's October 9, 2007 closing high. The biggest of the media conglomerates has soared as CEO Bob Iger has mastered the art of creating premium family-friendly brands, which it can exploit across all its platforms — the parks, TV networks, film, consumer products, and now even digital games.

(Read More: Disney Earnings Beat; 'Star Wars' Spinoffs Planned)

Viacom and CBS have both also thrived since the Dow's last 14,198 peak. Since the two companies split up back in 2005, they've both been on a run, hitting new highs. CBS is up more than 40 percent since 2007. Viacom is up about 50 percent since last time the Dow hit a closing peak.

When Viacom and CBS split, Wall Street expected Viacom's cable assets to prove faster-growing, while CBS more traditional TV ad business grew more slowly, but CBS has also has been on fire, bolstered by the addition of retransmission fees, in addition to ad revenue. (Read More: CBS' Moonves Talks 'Transformation' With Digital and Ad Growth)

And even News Corp., despite taking a hit from its struggling publishing business, and the News of the World Scandal, is up more than 20 percent since the last Dow peak.

Content distribution companies have also fared quite well, thanks to growing revenue from selling high-speed broadband, as well as premium services like video-on-demand. Comcast, the nation's largest cable company, which controls CNBC's parent company, NBC Universal, is up about 70 percent since we last saw the Dow's 14,198 intraday high in 2007.

DirecTV shares are up 89 percent since October 2007. The higher end of the two satellite TV companies, it has benefited from special content like NFL Sunday Ticket, and NBA League Pass packages. And DirecTV isn't just in the U.S. — in addition to its 20 million us customer, it has another 12 million in Latin America.

Time Warner Cable, the nation's second largest cable company, hasn't fared so well — it's down almost 10 percent after taking a deep dip in 2009 — accounting for its split from media giant Time Warner. And DISH, the second-largest satellite TV company, has suffered, its shares down about 20 percent since 2007. Both DISH and Time Warner Cable have suffered from growing competition from telecom companies, as well as higher content costs, not to mention the threat of "cord cutting."

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But the real winner in the content distribution space is Netflix. Its shares are up a dizzying 770 percent since the 2007 closing peak. The stock soared as it successfully transitioned from a DVD-by-mail company to become a digital distribution company. After a dramatic pullback on a public relations disaster, when it split up its DVD and streaming service and jacked up prices, the company has convinced investors that its streaming business is working. (Read More: Netflix, DreamWorks Partner for Original Kids Series)

Social media companies have only been public for a short time, but they've also been rising along with the Dow. Facebook shares ran up over 40 percent in the three months ahead of its quarterly earnings report at the end of January, but they've declined since then, leaving shares down 27 percent since its May IPO. (Read More: Facebook Invests in Media Relationships, Looks to Grow Mobile)

LinkedIn is a very different story, its shares are up 177 percent since its IPO in May 2011.

(Read More: Is 2013 the Year of Twitter's IPO?)

Zynga shares are off 63 percent since its December 2011 IPO while Groupon is down 80 percent since it went public in November 2011 respectively. But even these suffering stocks have seen a run-up into the Dow's latest peak.

(Read More: How We Got Here, Where We're Going)

—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin

Disclosure: Comcast is the majority owner of NBC Universal, the parent company of CNBC and CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.