Disadvantages to using an external drive?

[KorraSpirit]

I'm getting a new iMac, but the 1TB SDD isn't enough space for the amount of TV shows/Movies I have on my iTunes.

I was going to buy this 8TB external drive, and use it only for my iTunes media files and nothing else.

Are there any disadvantages to using an external drive for my iTunes?
Will it work the same way as my iTunes usually would?
Will I still be able to airplay/homeshare my files to my Apple TV?

 

[chabig]

No.
Yes.
Yes.

 

[KorraSpirit]

No.
Yes.
Yes.

Thank you very much!