There was a major improvement in digital to analog conversion technology in the 1970s, which made synthesizers much more accessible and logistically-reasonable.
A lot of the folksy, melodic, progressive music groups ran into a wall as the music industry shifted towards the much more simplistic arrangements of punk and the layered, extravagant, rhythm-based disco in the mid-to-late 1970s. Artists and groups that were doing R&B and funk transitioned much more seamlessly into disco, and there tended to be more adaptability due to the rhythm and dance qualities of those genres.
Bands whose styles are genre-specific or era-specific tend to alienate old fans by trying to adapt to change, and also face the dilemma of falling outside of the mainstream by deciding not to remain current.
The kind of sounds that are synonymous with bands like Ambrosia, Orleans, The Doobie Brothers, and Bread evolved parallel to new wave, but remained very distinct; those bands were succeeded by bands and artists like REO Speedwagon, Toto, and Christopher Cross; the remnants of those types of bands were the foundation for jazz-influenced AOR. Progressive rock, 70s folk pop, and melancholy piano and orchestral ballads with very acoustic instrumentation were all impacted heavily by the changing music landscape; a lot of the earlier, AM radio-type of pop from bands like The Raspberries, King Harvest, and Paper Lace were no longer in fashion, while the ballads of such artists as Olivia Newton-John and The Carpenters weren't topping the charts anymore. These genres went under before the turn of the decade.
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Disco, which was at the forefront of music in the latter half of the 1970s, simply gave way to a somewhat more basic, upfront sound, albeit with layered, nuanced, little effects made possible by new digital technology. New wave was really an extension of disco. The style and accessibility of digital synthesizers, however, also had a profound effect on rock bands. Synths were incorporated into everything.
Hall & Oates is an example of a group that adapted and carried on.
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A good example of a band that lost its way for a little while is Chicago. They tried disco when they had been known for a slightly edgier jazz fusion sound. Fans did not like what they heard. They eventually adopted the David Foster sound in 1982, only two albums later.
You sometimes heard disco rock in the late 1970s, which itself is a precursor to new wave.
If you strip down the strings and more funk-based elements, and replace them with synths, you get something very similar to new wave.
Between 1979 and 1981, ELO basically just dialed down the string flourishes, simplified the bass lines, and implemented a vast array of synth sounds for Time (1981).
https://www.quora.com/What-influenced-new-wave-music
Dance music didn't change too much at its core. The instruments and sounds changed. What died was a lot of the folksy music, as well as the tendency for prog groups to record elongated, melodic tracks. Music became more concise.
Punk and digital synthesizers had a lot to do with changing the sound of music at the turn of the decade. There was an injection of a serious "back to basics" element; within a few years, however, we started to see bombastic, highly-polished, nuanced arrangements of a different kind.
I would target punk and the proliferation of digital synthesizers as the reasons for the transition to new wave from disco.
Rock and roll bands were not necessarily required to be caught up in the new wave scene; ACDC proved this with "Hell's Bells" and "You Shook Me All Night Long" in 1980. Pat Benatar released "Hit Me With Your Best Shot" that year. Rock was very much alive, albeit not progressive rock.
I think age and a lack of recent mainstream success had a lot to do with some of the older bands fading away. There was already a very high turnover rate among new artists in the 1970s. Too much competition, and perhaps some failed attempts to adapt to change resulted in the end of quite a few groups from the previous decade.
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