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It's all content owned by me but it was ripped and cataloged (which took fucking aaaaaages) manually.
For Movies & TV Shows I used rippit, then batch processed them through Handbrake using an automater flow. Then they were tagged etc using iDentify.
All music is stored in ALAC as it plays nice with iTunes / iPhone etc but it can easily be converted back to FLAC in the future.
I've never bought anything from iTunes (apart from phone apps).
No worries.
One thing I forgot to mention is that all my music (approx. 400Gb) is stored in lossless format on my Mac Mini along with about 200 films and several thousand TV episodes. These stream (though iTunes) to both Apple TVs which makes playing media in either room really simple.