Hi Andrew,

Absolutely it will work.  If you just quit iTunes, then move the entire 
Music/iTunes directory onto your external storage device, and then restart 
iTunes with the Option key held down, you can choose your library’s new 
location.  Just don’t forget to leave that drive connected whenever you need 
iTunes, and to back up the contents of that drive from time to time to some 
other device so all your hard work isn’t later lost when that disk fails.  It’s 
also possible to use the same trick to put your library on a network drive, 
such as an Apple Time Capsule, another Mac, or even a Windows box.  Time 
Capsule has an “Archive Disk” feature, so you can use one of those for 
convenience, and archive it to a disk from time to time, that way accessing 
your iTunes library doesn’t require you to be tethered to a disk all the time 
(if you have a notebook).

Cheers,
Sabahattin

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