Those windows offer an ideal opportunity to go high and a bit wide with simple panels as Carol mentioned, but I would also go with a roman or woven wood for light control and mount everything just below the ceiling (see drawing and picture below). This solution would add some height and could actually help a little bit with the scale of the TV. Hope this helps!

Making short windows look taller! · More Info

Valances are a bit old-fashioned except occasionally in baths or kitchens or nurseries. TV stands are also "out" but I understand this one is special. It just doesn't work for the new style TV. Do you have a smaller TV in the bedroom where you could use the stand? Not really liking how your mirror doubles the kitchen cabinets. Why not move it opposite the windows so you can see the backyard in it?

Today TV's are being placed on or above credenzas that look more like furniture and are at least 25% wider than the set. You could do that opposite the windows. You can set the TV on a swivel base so it can be adjusted for good viewing. How wide are the room and the sofa? You might float your sofa facing the fireplace with the windows right of it.

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I like the look. My room is 14W X 16L. We currently have two couches each about 7.5 ft. long. One floats facing the fireplace separating the kitchen and family room. The windows are to the right of that couch. We would have to move one of the couches in front of the windows. I suggested possibly doing that and my family hated the idea. They said we could not see the t.v. from the couch facing the fireplace. They also said we wouldn't be able to look outside anymore. It is hard to put into words but it is like shutting out the outside in rearranging the room to focus on the t.v. Turning our backs on the outside world lol. If we could angle the tv somewhat, I think we could still see outside from the floating couch and I would like to have a chair. The chair could face the window. Thanks for the pictures and the help in visualizing what I can do in that room. Looks like the kitchen might be more of a priority for my husband. Will have to post a new pic of that dilemna ;)

Sometimes you just have to shove stuff around and try it for a few days to decide.

Have you made progress? Would your family enjoy two chairs instead of one of the couches? The room seems very small for two sofas, even if one is a loveseat. A couch and two chairs is the most versatile of all groupings to arrange.

-This is the one time I would suggest TV over the fireplace. Normally do not like the placement. Use the small stand for your TV accessories. The room is really too small to add anything else and agree with others on exchanging second couch for a couple of comfortable chairs or one with an ottoman, or even a chaise at an angle in the right front corner. I get the wanting see outside, having an issue with my bedroom to allow this arrangement.

How about something long and low, under the windows, with the tv between the two windows? (turning your coffee table to be infront of the other couch, making more room under windows).

Sure, might not be optimal for tv viewing if the sun comes in, unless you watch mostly at night. Try moving the little cabinet your FIL made to the empty corner, and making it a bar or something interesting. I think I would try removing the wood behind the mantle and lowering the mirror. and I would do as the others said, and change the valances.