If so, what format does the hard drive need to be?
Sorry you can not stream media files from a HD connected to your XB1. Only reserved for gaming. The xbox will format the drive itself. So make sure it's empty. If your tight on space on your xbox you can move/install games on the external
As for playing media files there are a few options
0, You can play some media files bought through the xbox/video stores through Media or Plex app
1, For external files, copy the media files to a USB stick and plug straight in the xbox one port (can only copy 4Gb or less per media file to the stick, I think)
2, No file size limit. You network your computer to your xbox (wireless or cabled).
Run some sort of DLNA server software on your computer which you point to your video etc files folder
Media player on xbox will find your choosen folder
Media player works fine for me, but very basic
Plex is now free so why not test it