You cant move the itunes program to an external drive, but you sure can have all the music on another drive.
I've done this on a Mac plenty of times, and I imagine it's the same process on Windows. Because iTunes will let you move your music from one drive to another with ease.
Here's all you do.
First, tell iTunes to start storing music on a new drive (Preferences > General and clicking the Change button under iTunes Music folder location. All music you import from now on will go to the new folder location, but iTunes will continue to recognize and list all of your music from your old folder as well.
Now you just have to move some of your music over to the new folder. Go to your old iTunes drive (usually [home] > Library > Music > iTunes Music Folder). Open the folder and you'll see more folders, labeled by artist.
Select some artist folders from the old folder location and drag them into iTunes or over the iTunes logo in your dock,
That's it! iTunes will begin copying the folders and song files inside them to the new iMusic folder. It automatically detects the duplicates and updates your iTunes index so that the copied songs play from the new folder, not the old one. When it's done copying, you can go back to the Finder and delete the duplicate folders stored in your old music folder (the ones you originally dragged into iTunes).
Of course you'll want to test this out before deleting your old music folders. Highlight a song from an artist whose folder you moved and select Show in Finder from the pop-up menu. A Finder window should open with the song file located deep inside your new iTunes Music folder. (Or, just open your new iTunes Music folder and navigate until you see the copies of the folders you dragged into iTunes.)
When you're satisfied, you can start moving your iTunes folders off your hard drive and free up some valuable space
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