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I know that storing the iTunes library on a Time Capsule isn't recommended as it won't be backed up. But with iTunes in the cloud and iTunes Match this isn't as big a deal. So I figured I'd move my library to my Time Capsule.

However, now that I've moved it, I'm unsure how to watch and listen to the media from my iPhone. Is there any way to start Home Sharing from the Time Capsule, or are there any apps that are designed to play iTunes libraries from NASs?

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For the Time Capsule directly? No

Sharing is done via iTunes running, irrelevant of where the files are stored. However you can look at something like Subsonic to share the music with multiple devices.

In both instances however this needs to run off another machine connected to the time capsule.

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