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Before you start trying to transfer your iTunes folder to an external harddrive, you must ensure you have a hard drive large enough for your library. The size of your library is listed at the bottom of the iTunes screen. If you want to transfer multiple libraries, click on each library, such as Music or Video, to view the size for each one. For best results, use a 500 GB drive or larger.
Make sure your computer does not turn off or go into standby mode automatically after one to two hours of inactivity. This will cancel your transfer. Open your system's power settings and ensure your internal drive does not automatically cut off during periods of inactivity. Large iTunes collections may take several hours to transfer.
Connect your hard drive via a USB cable or WiFi connection. Wait for your system to recognize the drive. You will not be able to transfer files until the drive is recognized. This typically takes less than 30 seconds.
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By default, iTunes separates your content into different libraries. By consolidating, all your libraries are placed in a single folder, which can then be easily copied to an external drive. You can backup individual libraries, but the process is slightly more complicated.
Open iTunes. For Mac, open the iTunes menu and select Preferences. For PCs, go to Edit and select Preferences. Select the Advanced tab. Check the box Copy Files to iTunes Media folder when adding to library. Press OK to consolidate. Wait for iTunes to copy all files that weren't already in the iTunes media folder to the folder. The original files are not deleted or moved. If you want to save space on your internal hard drive, delete the files from their original locations.
Go to File, select Library and choose Organize Library. Check both boxes: Consolidate files and Upgrade to iTunes Media organization. The second option ensures you are using the most updated iTunes file organization. If you are already using the most updated version, this option is not available. Press OK.
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How to Transfer iTunes Folder to an External Harddrive
If you have not changed the default location of the iTunes folder, exit iTunes. If you've changed the folder location or cannot find it using the directions below, open the Preferences window in iTunes. Select the Advanced tab. Note the location listed in the iTunes Media folder location window.
Open your external hard drive. If you want to store backup iTunes to a specific folder on the drive, open the desired folder. Next, browse to the iTunes folder. By default, it is located in the following path:
Windows Vista or 7: \Users\username\My Music\
Drag the iTunes folder to your external hard drive. This immediately starts the transfer process. When the process is complete, the iTunes transfer window will disappear. An estimated time is listed during the transfer process.
Restore your iTunes folder by dragging the copied folder to the desired location on your internal drive. Apple recommends using the default folder from above. Open iTunes while holding down the Option key on a Mac or the Shift key on Windows. Select Choose Library, choose the iTunes folder you just moved back and choose the iTunes library file located inside the iTunes folder.