EVEN before News Corp started talking to Sir Run Run Shaw about taking a stake in Television Broadcasts it was planning some fundamental changes. As IVAN TONG and RAY HEATH report, TVB was targeting the developing economies of China and the Asian region. IN the coming battle for viewers, the most powerful weapon in the armoury of broadcasters will be their programmes. Delivery systems will count for nothing if the viewers don't like the product. Hongkong analysts are unanimous that this is where TVB will score over its orbiting rivals as well as the terrestrial competitors. Sir Run Run Shaw's production skills and experience mean the group starts the battle with a huge library of programmes - from modern pop singers and soap sweethearts to classic Chinese films going back decades. Unleashed on Chinese communities throughout Asia, they should give the group an edge which will be hard to blunt. The deal has yet to be finalised - and has the hurdles of the Broadcasting Authority to jump - but the potential links between the Fox library and TVB's Chinese portfolio are obvious. News Corp's satellite expertise may have been learned the hard way in the UK, where the early days were rough and tough, but the group can pass on valuable experience to TVB. Even before News Corp started talking to Sir Run Run Shaw about taking a stake in Television Broadcasts (TVB), the world's leading Chinese television broadcaster was planning some fundamental changes, and was targeting the developing economies of China and the Asian region. TVB's Chinese channel is now the most popular in Shenzhen and about one-third of Guangdong's population is able to receive its signals. On the Asian front, TVB is Asia's largest seller of home-produced programmes which are dubbed into eight languages including Mandarin, English, Vietnamese and Thai. ''China will provide a lot of opportunities in the medium run in terms of programme licensing and greater co-operation with the mainland TV stations,'' said TVB deputy general manager T.K. Ho in a recent interview. TVB is now selling programmes to those Beijing-and Guangdong-based stations, but with the Chinese authorities gradually liberalising its media industry, more TV stations were expected to buy programmes from outside, he said. However, the results have yet to be seen in the profit and loss account. Mr Ho realises that the lack of hard currency to pay for overseas programmes remains a problem. ''The situation will change when the mainland economy develops further and the demand from the local audience for quality programmes rise accordingly,'' he says. ''Obviously, when the China market is taken into account, the company's focus has to be long term.'' TVB has become the world's biggest purveyor of home-made programmes, churning out 12 hours of original programming a day, 5,000 hours a year, giving it a powerful position in programme licensing. TVB assistant general manager Alfred Ng says the company's revenue in this area will be boosted when the Taiwan Government cracks down on the pirate cable companies which have been bleeding the legitimate broadcasters. Initially, Taipei is expected to issue three cable TV licences in each of 59 districts, which means TVB could deal with those licensed stations for its programmes, he says. Meanwhile, TVB recently reached an agreement with several international programmers to jointly distribute programmes to Asia through Palapa, the Indonesian satellite covering Southeast Asia. Members of the new alliance will co-ordinate in the next few months in a number of areas including an investigation of distribution methods in each country, targeting CATV, SMATV, MMDS and UHF retailers. Media stock analysts realise that this represents a move by TVB to tap a larger Asian audience apart from the existing sole means of licensing programmes. Despite all the overseas plans, Warburg Securities analyst Allan Ng said before the News Corp announcement that the local market would be the major income source for TVB in the years to come. ''Advertising revenue has never been a major problem for TVB, with the exception of 1991 when tobacco advertising was banned entirely,'' he said. The coming few years would see stable growth in advertising revenue from the Hongkong market, he said. Analysts agree that a greater concern for TVB at home is the imminent poaching war with the media group's new competitor - the Wharf-owned Cable TV. Cable TV expects to have some 1,500 staff by October when the service is launched, providing 10 channels initially. TVB's war with rival broadcaster Asia Television (ATV) was responsible for the group's declining profits in 1990 and 1991. On the cost side, the launch of Cable TV eventually will increase wage pressure, particularly on technical and programming staff. However, it is expected to be partly offset by TVB's recent reduction in royalties and the huge supply of technicians from overseas. Mr Ng does not expect to see a damaging poaching war with Cable TV as the company should be able to recognise that the whole industry would suffer in such circumstances. ''It should be clear that the Cable TV service is 'narrowcasting' while TVB is broadcasting in nature,'' he said. What existing investors in TVB will want to see is how the arrival of a new fellow shareholder will improve prospects, and the outlook for the share price, which some analysts warned was running ahead of events before the News Corp move.