This is an area I've studied for a while, and I don't mean 'poked around on Google for the last few months in my spare time'.
At the time Napster came out, I was working for my uncle's record company in the Greater London area, as a copyright enforcer (part time, basically keeping my ears open for his songs at places and making sure the likes of PRS were crediting his songs, as well as looking for performers selling their own versions out of a bag), and so I remember trying to push him towards MP3's. He resisted, didn't 'get' why anyone would be interested, especially because of the lower sound quality. He 'got' technology (he was also big into Steel, used to supply Toyota with much of their steel in the 80s) but didn't see it as anything but a fad. His contemporaries, however, tended to have a bigger problem. Control.
As a small label, he was 'left out' of much of the stuff. He was never told which stores would count for chart sales that week for instance, and he'd get last-minute notice of 'music industry' events, which meant he never had the ability to even change things in the industry, because it was always a fait accompli.
The music industry is, and has been for many decades, about 'control'. from the 50s on, music bosses understood that they could shape the population through music, make trends, break them, even spawn movements. It's hard to relinquish that sort of control. It becomes somewhat of a god complex. So when you see yourself as 'masters of culture', it's incredibly hard to disabuse yourself of that, and recognise that your time has passed, and you're now just selling a digital commodity, and your overall place isn't what it was. They're also afraid that any kind of acknowledgement of that, will devalue their prestige in the eyes of others, even though record bosses aren't the mythical creatures of wonder they believe themselves to be, and haven't been considered such for decades.
Happens somewhat in TV and movies now as well. A year or two later I was working on a TV show in the US for a Viacom channel. I was the only non-US crew member (based in Liverpool) and since it was a competition, part of my role was to sell it to people in the UK to get them to take part. I worked for the competition, which was televised by the channel, produced by a 3rd party production company. The issues I had just getting clearances to play episodes of the show to interested gatherings was incredible, because I wasn't a Viacom employee, and so was not under THEIR control, despite my only purpose being to promote the show and make the next season even better.
And it's not that uncommon a story in general. When the 08 recession happened and a lot of well-to-do middle class people lost their jobs, many people carried on as before, trying to keep up the veneer, and project an aura of 'no change', eating through their savings, and then loading themselves up in debt, just so people won't think times have changed and everything's all good.
But as anyone in a stormy area knows, trees die and rot from the inside out, and look strong and healthy until they're blown over, causing massive damage, because they rot from the inside out. We have no 'tree surgeons' to clear out the dead wood in the content market however.