Most of my knowledge on this point comes from the book The Siege of Mecca, which details the capture of the Grand Mosque in Mecca in 1979 by radical end time Muslims. Prior to the siege, the government in Saudi Arabia was trying to balance the ultra-conservative Wahhabi religious rulers in the country and a need to modernize. Saudi Arabia went through a rapid period of industrialization.

The primary point you need to understand is that Islam has a long, varied history with iconography. The particular strand of Salafi and Wahhabi Islam that predominates in Saudi Arabia has historically been hostile to depictions of the human form, with some exceptions. You may notice that, while many churches, synagogues, temples, etc. will often have human iconography, e.g., depictions of Jesus, the prophets, God, Buddha, Vishnu, etc., mosques often have only stylistic scripts and designs. The justification for this is to prevent "idolatry."

Wahhabi and Salafi Muslims found themselves in a strange situation in the middle of the 19th century when new technologies were introduced in Saudi Arabia with visual depictions of people, i.e. movies and television. In 1965, Saudi Arabia tried to introduce TV, which led to unrest and violence. In fact, one of Saudi Arabia's princes literally led an assault on a TV station which led to a shootout where he was killed.

King Faisal, the king who introduced TV, was assassinated by his own nephew in 1975 in part due to his modernization reforms, which included the introduction of TV. Saudi Arabia had cinemas at this time, but it was ultimately decided that they should be closed following the 1979 siege. The 1970s were a time of increasing radicalization in the Muslim world and movie theaters, television, and other modern luxuries were seen as inflaming tensions. Obviously, too, a movie theater where large numbers of people had gathered to engage in what extremists would call idolatry was asking for violence, bombings, etc.

Although movie theaters were shut down, television continued. However, television also had numerous restrictions that came and went, including, for a time, banning women from appearing on TV.

Just a clarification- I'm referring to the commonality of movie theaters in Saudi Arabia....