How is everyone?

Ok my issue is, My IMAC internal 1tb hard drive is filling up from Music & Movies. I run everything through iTunes library and stream them to my ATV2 and like this setup. Now I have an OLDER AE with a My Book Live 2Tb NAS hooked into my AE and have nothing on it but my Time Machine Backup on it don't ask me why I chose 2Tb for this I just heard a lot of people saying that Time Machine takes up a lot of disk space so I wanted to be on the safe side. OK now my issue is should I go ahead and buy a Time Capsule 2Tb and have time machine backups on there and use my my book live 2Tb connected to time capsule and drag my iTunes library onto it or should I keep my AE and buy another my book live 2tb and hook it up to the AE and drag the library onto IT?

I Just want to save space and continue operating my music and videos as I do on my internal hard drive. Please give me all your ideas I also was reading a lot about Synology etc I just want to operate how I was no extras or whatever. THANKS!