Itunes on Hard Disk with new MacBook Air - iTunes cannot find library file

Hi, sorry for the potentially daft post.

I recently got upgraded to a MacBook AIr - I am running all latest versions and Mavericks. My Itunes Library lives on an external hard disk (probably like for most of us... its too big!

Anyhow, I really like to be able to plug my hard disk into the new Air and have itunes recognise the library. Ideally, I like to be able to plug the HD into my other Mac - and also see the library there. Am I asking for too much?

When I open itunes holding the option key and select the music folder, the MacBook Air says: "An iTunes library file could not be found in the folder "Itunes Music. Please choose a different folder."

What am I doing wrong? It might be possible that I am asking for too much (ie having the ability to operate the itunes library on the hard disk essentially from two machines. But I'd like to know so I can figure out the workaround. Thanks!