As I was an amateur musician in the late 70s and up through the mid-80s, I can give you my perspective. First off I want to commend a bunch of you for listing some great acts of the 80s. I listened to much of this stuff because I had friends who worked in record stores and told me about new stuff.
That leads me to the biggest issue of the 80s. Corporations took over the radio stations and, except for college radio stations, none of these bands were played on the radio in the US. MTV played some of it in the beginning because they didn't have enough videos to fill their rosters but ultimately, they just played the "popular stuff" that was pushed by the labels. They did have some underground shows such as 120 Minutes.
The other thing that happened was that music recording and production started to become accessible to anyone. You could have an 4 or 8 track recording studio in your home for not a bunch of money and a lot of bands and musicians became producers and engineers.
Music was underground for a long time but those who looked for it could find absolutely great stuff. I know Mike didn't have a complete list but let me add a few (by the way, huge points for knowing The Raincoats -- love that band): Ian Dury and the Blockheads, The Go-Betweens, Ministry, Oingo Boingo, Tom Verlaine, Throwing Muses, Catherine Wheel, Aimee Mann, The Bongos, Thin White Rope, Camper Van Beethoven, China Crisis, The Replacements, Young Fresh Fellows, They Might Be Giants, Howard Devoto (as a solo act), Comateens, Crowded House, Dead Kennedys, Lloyd Cole & The Commotions, Fugazi, Mission of Burma, Wednesday Week, The Last, The Rain Parade, Romeo Void, Simple Minds, The Jesus and Mary Chain, Gary Numan (Tubeway Army), Ultravox, The Glove (a mix of Robert Smith and Steve Severin), Grace Jones, The Housemartins, Japan, Jonathan Richman, Killing Joke, Nina Hagen, Lene Lovich, Martha and the Muffins, Midnight Oil, The Mutants, My Bloody Valentine, and Robyn Hitchcock to name a few more.
How did 70s rock music transition into 80s music?
80s music appeared to be a re-visitation of the beginning of Rock — when "singles" ruled the AM radio. In those early days, in the event that a craftsman had a hit, he/she could get to record an "collection" (when those modern LP records appeared). A LP could have two hits and 10 tunes of forgettable filler melodies. Most craftsmen were characterized by their hit singles.
The 60s and 70s saw an ascent in FM radio and AOR (Album Oriented Rock) which gave numerous specialists the opportunity to make bigger works, or gatherings of melodies which frequently remained all in all work, and empowered a more extended tuning in/focus time. Beside funk and disco dance hits, the 70s inclined towards Album Oriented Rock.
The 80s saw a swing away from longer works and AOR, and back towards snappy singles. I'd say MTV had a great deal to do with the progress to 80s music. ("Video killed the radio star"):
MTV presented many gatherings who had fantastic singles, yet probably won't have accomplished acknowledgment without MTV video openness: Squeeze, The Vapors, Duran, Adam and the Ants, the B-52s, The Cars — to give some examples. (Note, I said "may" — yet that is my hypothesis.)
MTV constrained many long settled stars — David Bowie, Rod Stewart, even The Rolling Stones — to make video-commendable tunes. (That is — SINGLES.)
Peter Gabriel is a story regardless of anyone else's opinion. He was genuinely known from his Genesis Days — yet those astonishing recordings of "For sure" and "Demolition hammer" certainly kicked him into the super frightening.
MTV — after a ton of asking, cajoling, and dangers — at last changed their bigoted whites-just strategy, and began broadcasting recordings by people like Michael Jackson and Prince — presenting various dark craftsman to a lot bigger crowd.
In outline, I think MTV during the 80s — and later the Internet and YouTube — abbreviated individuals' capacity to focus, made a market weighty on short snappy singles, and made it progressively hard for craftsman to make "collections" which would allow them an opportunity to introduce their bigger vision.