Agreed, it's only telling that the consoles have great secondary functions and people happen to use them for it. People "surprisingly" do not spend 100% of their free time on video games (even me!).I don't think it's indicative of anything that people are doing those things (watching shows/movies, listening to music) on their gaming systems. Including gaming, these are activities that people have always split amongst their free time. The only difference is now they can do all of those things on one box.
Video games sell video game consoles. The PS3 is the #1 Netflix device, but people do not buy a PS3 for that, they buy it for video games. If you make video games, people will come.