LA Good Questions: What To Do Around the Windows?

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So, here's the problem: I'm frustrated with my living room. Specifically with the window seating area feels like dead space: I've moved the coffee table to another room (where it actually gets used!), and the dogs have taken over the window seats.

After sifting through all the recent house tours, I've been inspired to mix things up a bit...but I'm not exactly sure how to utilize that space. A sitting area for two? A solitary spot to read and spy on the neighbors? Ideally, I'd like to make it both company and dog friendly. Should I move the window seats to another room (they are Ikea lack shelves with custom cushions made by my mum), and get a bigger rug? And I keep finding myself drawn to this lovely chaise, wondering how I can style it to make it work...