Can't get iTunes to work

Before my macbook pro went down, I had transferred my iTunes media folder off of my hard drive and onto an external drive. I purchased a new macbook air, and while I've gone into preferences and set the default media folder to the one on the external drive and deleted the old one, none of my music, movies, playlists, anything is coming up. In order to play anything, I essentially have to redownload the entire file back onto the computer, which I do not want to do. Why can't iTunes use the file on the external drive? What am I doing wrong? Very frustrating.

It can but you need to re-import all of your music into iTunes still. It won't create a new library, it will use the one on the drive, as you have sert it to, but you still need the data to be transferred in order for iTunes to be able to read it.