Apple is touting themselves as the world’s largest online music retailer and these numbers are tough to argue with. As of Thursday the company announced that iTunes has reached the 5 billion mark and beyond for the number of online song downloads since their launch in 2003. It seems like it was only a year ago that they reached the 3 billion mark. In fact it was not quite a year go last July when they announced they had reached 3 billion downloaded songs.

To get an idea of just how many songs that is, customers had to have downloaded a little over 2.5 million songs per day on average since the site launched. In reality 2 billion of these were done in just the last 10 months, making it over 6 million per day for the past year.

iTunes has officially started offering HBO series episodes available for download online through iTunes. This is a welcome announcement for many who would love to get episodes of the Sopranos, The Wire and Flight of the Conchords onto their PMP’s, but it comes at a price.

The price is actually what makes this announcement most interesting. Apple, who seems to have previously been with the belief that all series shows are priced equally, seems to have made a concession with HBO. The series episodes of the Sopranos is priced at $2.99 each, which is a whole dollar more than the usual $1.99 rate for a TV show.

Apple today announced the immediate ability to purchase movies through iTunes the same day that they are released to DVD. This takes away another hurdle that Apple needed to get over to increase the number of online movie rentals through iTunes, and comes only months after the initial launch of the ability to purchase movies at all through the online service.

Apple says they will be providing new releases for sale from 20th Century Fox, The Walt Disney Studios, Warner Bros., Paramount Pictures, Universal Studios Home Entertainment, Sony Pictures Entertainment and Lionsgate, among a couple others. The new release purchases are priced at $14.99 each and can be viewed on a Mac, PC or any iPod with video and require iTunes version 7.6.2 which is available now as a free download.

Starbucks and Apple’s iTunes continue to expand the relationship which shows synergy between latte drinking customers and the iPods they love. The latest incarnation is the announcement of a weekly free music download which will be made available to Starbucks in-store customers.

This new promotion, dubbed Pick of the Week, debuted today with a song from the band Counting Crows. Customers who are in-store on a Tuesday will be offered for free a card with the latest song information as well as a code to download that tune from  iTunes. A music video looks to also be available, though its not clear if that will be a weekly choice as well. Whatever the download, customers will have 60 days from the week the card is distributed to cash in their code for the download.

The digital music revolution is definitely here, all you need to do is look around and it seems that everyone is using an iPod or other PMP device. Digital tracks have quickly outpaced traditional CD sales and online digital music sales have skyrocketed.

Back in February we reported that Apple’s iTunes store was the second largest music retailer in the United States. Apple announced this week that it was now the top music retailer in America, surpassing Wal-Mart.

Lionsgate said today it is working with Apple to make use of the latter’s Digital Copy for iTunes so select DVDs will also be available for digital viewing. The first Lionsgate film to get the iTunes treatment will be Rambo on May 27th.

Lionsgate said that by using Digital Copy for iTunes, those who purchase select DVDs or Blu-ray Discs will be able to insert the disc into a computer. The customer then enters a unique code into iTunes, and the movie is automatically copied to their iTunes library.

Apple’s iTunes online music download service has moved into the number 2 position as the second largest U.S. music retailer, beaten out this time only by Wal-Mart. We had seen just last July that iTunes had moved into the number 3 spot, beating out Amazon and following both Best Buy and Wal-Mart, and the trend so far is continuing in Apple’s favor.

Amidst the new product announcements unveiled during the MacWorld 2008 keynote today Jobs slipped in a message about a new feature that will easily get your DVD content into your iTunes or Windows Media Player library called Digital Copy. Partnering with Twentieth Century Fox, Apple is offering the Digital Copy feature on DVDs from the Fox studio starting with “Family Guy Presents: Blue Harvest” which releases today.

Anytime someone purchases a DVD from Fox that has the Digital Copy feature they can insert the disc into their computer, enter a unique code and transfer the movie into iTunes or Windows Media Player. The movie will then be available for unlimited viewing on their computer, iPod with video, iPhone, Apple TV or other video media player. There is of course some restriction on your purchased DVD’s Digital Copy feature however. It will transfer the DVD to only one instance of iTunes, limited by the unique code required.

Apple announced the immediate launch of iTunes Movie Rentals today during the MacWorld 2008 keynote speech, allowing iTunes users to get limited-time download of movies from any of the major studios for as little as $2.99. The new service is part of iTunes version 7.6 which is available now and gives a rental download of movies for 30 days, but once you begin watching the movie the rental will run out in 24 hours. It can be watched as many times as you would like within that time. You can even start watching on your computer and then transfer the video to your iPod and finish watching the movie on the go.

Apple appears to have picked up all the major studios with this offer with the list of participants including 20th Century Fox, The Walt Disney Studios, Warner Bros., Paramount, Universal Studios Home Entertainment, Sony Pictures Entertainment, Metro-Goldwyn-Mayer (MGM), Lionsgate and New Line Cinema. iTunes plans to have over 1,000 titles available by the end of February with rates of $2.99 for regular titles and $3.99 for new releases. For another dollar iTunes will deliver titles in high-def with Dolby 5.1 surround.

According to the Financial Times, Apple is finally getting ready to announce a deal with Twentieth Century Fox to offer Fox movies available for download through iTunes. The service would allow users to download Fox movies as a temporary digital “rental”. According to the source Fox is also working out a feature on their physical DVD movies that would let DVD owners temporarily transfer the movie content from the DVD to a digital player like an iPod or a computer using Apple’s DRM.

This is something that Apple has been trying to get going for a while but has met some resistance with most studios, likely for fear of losing sales due to a higher piracy rate of movies and lower costs of ownership. Another issue is the threat that this poses to video on demand services from places such as Comcast and DirectTV. Apple currently sells some movie titles on iTunes from Disney and Viacom but has not had as much luck getting the ball rolling with video as it has with online music purchases, which more that likely has led to a rental offering.

In a recent report from MacNotes.de, unlocking an iPhone sold by T-Mobile Germany is simple, done in only a few seconds and is handled by none other than Apple’s own iTunes. Due to a temporary injunction against Apple, the company has been forced to sell the iPhones with the ability to be unlocked in Germany. Apple will also be forced to sell them unlocked in France in six months after their launch on November 29.

In case you’re not familiar with what “unlocking” means exactly, it prevents the iPhone from being “locked” to a single network provider such as AT&T in the U.S., and allows the phone to accept any SIM card. Up until now there have been a number of hacks to unlock the iPhone and allow it to be used on other networks and other countries, and Apple has been in a constant battle to thwart the hacks and keep the phone locked-in with only approved providers.

Today in an interview with the Wall Street Journal Steve Jobs said that iTunes will be reducing the price of their DRM-free tracks from the current $1.29 down to 99 cents. These songs from iTunes were launched as iTunes Plus back in May and offered a number of titles, mostly from EMI, without any digital rights management restrictions. They also came in a little higher quality for a little more money with 256 kbps AAC encoding compared to the 128kbps encoding for the rest of the 99 cent versions. “It’s been very popular with our customers, and we’re making it even more affordable,” said Jobs in the interview.

This move brings Apple’s prices a little closer to those of Wal-Mart and Amazon who both offer song downloading services with DRM-free music with some titles going for less than 99 cents. This also will make iTunes slightly more desirable compared to new players coming into the online music game such as Doug Morris and Universal Music Group who are looking to make some competition for Apple in a different way.

You may remember back in early July when Universal Music Group (UMG) head Doug Morris decided not to renew a 2-year contract with iTunes, and instead provides content month-to-month on an “at will” basis. Reason particulars were not initially cited but generally revolved around how Jobs and iTunes put restrictions on how UMG could market their music.

It sounds like Jobs is far from hearing the last of Morris and Universal Music. According to a report today in BusinessWeek, the company is gearing up to launch an iTunes competing service of their own to be named “Total Music”. Morris and company isn’t looking into this venture lightly either. Aside from his own company Morris has also convinced BMG Music to join in, and is already having talks with Warner Music Group. Together the three companies music giants would have control of over 70% of all the music sold in the U.S., with Apple iTunes currently holding control of over 70% of the music sold online in the U.S.

The solo work of George Harrison has now been added to iTunes making him the last of each of the Beatles to be available through the site, preceded by Paul McCartney, John Lennon and Ringo Star. Unfortunately the Beatles as a group are still not available on iTunes, just the solo work of each artist separately with no word of any Beatles albums as of yet.

Starbucks along with Apple iTunes has announced that they will be giving away 50 million iTunes songs at Starbucks locations to help promote the mobile iTunes store and Starbucks’ Now Playing service. On October 2 the iTunes Wi-Fi Music Store will launch with a service provided in Starbucks locations which will display the current song playing through the Apple iPhone in the stores and allow users to buy and download the song without paying any hotspot fees.

In the additional promotion announced today which will run from October 2 through November 7, Starbucks locations will be giving away “Song of the Day” cards that can be redeemed that the iTunes store for a free song download (selected by Starbucks). The coffee company is planning on giving away 1.5 million downloads per day to total more than 50 million songs, so the odds of you getting one when stopping through a Starbucks next month are not too shabby.