In 2001, an L.A. gallery showed original illustrations of the book and while del Toro was working on Blade II and in an "imprudent financially" decision, he bought five or six of them. "What immediately grabbed my attention was the artwork. They were so creepy and so engaging," del Toro said of the books. "They have the strength and tempo of a fireside tale."

Del Toro said he wanted to stay away from making an anthology film: "They're always as bad as their worst story."

He then introduced the director to great applause from the packed theater. "I was terrified to meet Guillermo," Ovredal said, before adding that the Oscar winner was "so warm and so inviting" to work with.

Del Toro, meanwhile, praised Ovredal's previous work, Troll Hunter and the Autopsy of Jane Doe. "He's not going to abandon the genre. He loves it," del Toro said.

Of the setting of Scary Stories to Tell in the Dark, del Toro said, "It was important to set it in the '60s. The less resources they have, the better. They don't have Google, cellphones. The other reason is because stories traveled slower, but deeper."

Overall, "I think we were making a movie for ourselves at age 12," said del Toro of the collaboration. "There are three generations that have gone through these books. We always felt this is something kids and fathers could watch."

The conversation then pivoted to the creation of the film's monsters. "We're trying to keep physical effects alive," said del Toro, garnering a round of applause.

Footage from the film's production was then shown as the film's monster creator, Norman Cabrera, described how they brought the monstrous scarecrow Harold to life. The final design of the character was described as a "mask that has been rotting in the sun."

Next up was the character from the short story "Big Toe," a hideous corpse brought to life through extensive prosthetics and makeup to match up to the disturbing source material.

For the film's version of the Pale Lady, a pale, bloated and smiling entity, designer Mike Hill said the biggest challenge was making a monster that didn't look "inherently evil appear absolutely terrifying." To make the monster appear believable on film, the production team had to craft a massive prosthetic for the performer that included a large mask and a rigorously difficult paint job.

A new creation, made specifically for the film, called Jangly Man was introduced. "The difficulty with this was to not do a typical decomposing corpse but to truly do evil," said del Toro. The Jangly Man is a contorted monster with a ghoulish face who crab-walks and grins at his victims.

The panel stressed the importance of practical effects. "I don't have to point to a tennis ball and tell the actors to scream. It's real. That's such a luxury," said Ovredal.

"I've been making monsters for 30 years and this is a dream team," said del Toro. The panel then closed with the debut of a new trailer for the upcoming film showing all the monsters in action

Scary Stories to Tell in the Dark opens Aug. 9.