External Hard Drive to Apple TV 3?

Answers (above) to your (OPs) questions are correct. It sounds like you are wanting a solution that unchains your computer from the equation but still works. Think server instead of hard drive. If the server can run iTunes, it can get you pretty close to what you want.

If you have some old computer that you are no longer using, it can be your "server" (if it can run iTunes). If not, you could buy a cheap windows machine (even a used one to get the price low) and dedicate it to this purpose.

OR, consider going with something else (TV like) such as the WD device that allows local storage of your choosing.

Source: http://forums.macrumors.com/showthread.php?t=1504419&goto=newpost

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