Ben Horowitz, in an old blog post titled "Why We Prefer Founding CEOs." Emphasis mine.
The music business has been continuously disrupted and revolutionized by the underlying technology since the outset. In fact, it’s still widely referred to as the “record industry,” because the entire business was created by the invention of the vinyl record. For the first few decades of the industry, songs were never longer than 3 minutes due to a technological limitation (the record would skip if the grooves were too thin). The album itself is a construct that originated with the total number of songs one could fit on a 33 1/3 Revolutions Per Minute (RPM) vinyl record. In the 80s, the invention of the CD completely revitalized the industry and led to (literally) record-breaking sales.
Despite this dynamic history, modern record company executives badly missed the most sweeping technical innovation—the Internet. How was that possible? By the time the Internet arrived, all of the original founders of the record companies had been bought out, retired, or died. The new, professional CEOs were unwilling to let go of the most basic assumptions driving the cost structure of their businesses. Specifically, they wouldn’t give up their stranglehold on distribution and the value they placed on owning the recording.
They were proficient at running the current business, but lacked both the courage and the moral authority to jeopardize the old business model by embracing the new technology. The transition would have been far easier if these executives running the companies had invented the old models. The founders of the music industry likely would have ditched old assumptions, because they would have been nuts to do continue believing an assumption that no longer makes sense.
Conversely, Netflix, run by cofounder Reed Hastings, provides an excellent counter-example. Faced with a similar transition (from distribution of the physical recording to electronic distribution of the bits), Netflix let go of its old assumption that customers wanted DVDs mailed to them, invested in innovation and produced a series of brilliant new offerings (streaming video to Xbox 360, Sony Playstation 3, Tivo, Wii, connected DVD players, and a host of devices) that are enabling them to transition smoothly. Hastings wasn’t married to the old distribution model precisely because he invented it.