Hanging a flatscreen in the niche would look bad, but I understand the storage space is nifty.

If you're a bit technically skilled, you could make a recessed cabinet with a trunklid-like door lift (sorry, I have no idea how to explain this in english) and hang the tv on the door.

Or a big sturdy pull out mount set, so you still have some sort of storage behind it

Or a sliding tv wall. But I have no idea how this should work technically..

And yes, I'd use the heights of the wainscoting for the lower cabinets/drawers.

Consider building out the wall you are hanging the TV on, and also using pull out mounting accessories.

HI -- I would re-move it all because it doesn't measure up anymore , You can't really re-model it . You have to just start over . It was for another time and bigger entertainment fixtures . Just have something new built that fits what you have today .

I have to see how much it will cost to reduce the depth of the shelves and middle unit and compare it against the cost of starting over as you had mentioned above.

Is it easier to move the back wall forward or cut down the depth of the walls by shaving off some of the front part? I would prefer to cut the walls back so that I don't lose space.

Adding another back wall will be much easier.
If you want all the space and cut the walls back, starting over might be cheaper.

After reading all of these comments, we might cut out all of the old built-in structure and just mount the 75'' TV on a hinge with a low profile media console underneath. I am thinking of something with a low profile similar to the Bromley 75-Inch 2 Tier TV Bench.

You could always build out the middle section. Maybe add some more storage on the bottom for DVDs in the process. That way your TV can we wall mounted, and you use the least amount of effort.

The other option? Pull it all down!

If you are willing to go down in TV size, you will need to rip out a good chunk of the unit to get it to look correct. You could just remove the shelves and the vertical walls but leave the ceiling build out with the recessed light. Then rebuild your vertical walls but not as deep. I would suggest not making them as thick though and try to match the dimension to the ceiling drop.

If you want to go with a smaller TV that will fit the current build out, throw a back panel for the TV to mount on about 6-8" from the front and use the space behind to house your AV equipment. You can build doors on the sides to access things but with the right equipment (remotes), you really wouldn't need to very often.

Good luck!

I think that we are going to try to see if we can modify the existing structure to look similar to the attachment by enlarging the middle cavity and building out the back wall in the center cavity (so that it is more shallow behind the tv). We want the center cavity to be big enough to accomodate a 75'' TV. I also like the shelves going to the floor and the cabinets in the middle. Now I have to figure out the cost ....

Call a designer to help you and you will avoid costly mistakes and get a great look. Scale is the key here.

I ended up removing the entire built in. I have another question. If the ceiling light were left in the ceiling and a 65'' or 75'' flat screen tv was mounted to the wall, would the overhead light cause glare on the TV screen.

This is the ceiling light which used to illuminate the center top built in shelf above the TV.

Build an uplight alcove? (or back wall with lighting behind it)
I wouldn't want direct light over/above/in front of my tv.

Are you planning on building another shelving unit in its place like the picture you posted or were you going to just leave it an open alcove and put a cabinet or entertainment unit in there to house things? I agree with rinqreations comment about not placing a light above or in front of the tv so if you are not planning a build in, I'd cap the wires and ditch that plan. You would probably only leave it if you build in a shelving unit and want to do small accent lighting for the top openings. You could daisy chain off that wire to add lights to side cabinets as well. If possible, I would put them on a separate wall switch so you could turn them off when watching a movie. Something else to consider before you get too far into things is sound/speaker location. If you are just planning to use the TV's speakers, no need to worry but I'm assuming that at 75", this is going to be a surround sound situation. With a dropped ceiling, it should be relatively easy to run wires and mount small satellite speakers from the ceiling but if you are going all out, you still need to find space for a center channel and sub. The sub can be anywhere in the room but you will need to provide a space for the center channel in your build out.

Thanks for your comments. We don't know right now if we are going to do a built in or just have a media cabinet on the bottom and mount the speakers to the wall on the sides.