The closing event of the 30th annual PaleyFest, the American Horror Story: Asylum panel brought together the producers and stars for a discussion of FX’s envelope-pushing anthology series – and to reveal the title for Season 3.

In attendance were creators Brad Falchuk and Ryan Murphy, executive producers Tim Minear and Dante Di Loreto, and stars Naomi Grossman, Frances Conroy, Evan Peters, Lily Rabe, Sarah Paulson and Oscar winner Jessica Lange.

For its second season, which concluded in January, American Horror Story moved its setting from the Murder House in present-day Los Angeles to the Briarcliff Manor in 1964 – several of the actors returned in different roles -- focusing on the inmates, doctors and nuns at an institution for the criminally insane.

Two standing ovations occurred during the panel: The first was reserved for Lange, who played Season 2's tough, but damaged Sister Jude, and the second was bestowed upon Oscar winner and surprise guest Kathy Bates, who joins the cast for Season 3.

"You know I love me an Oscar winner," Murphy said. "Jessica and I are always talking about actors she loves, and she and Kathy are friends and have done a couple movies together."

Bates shared that she had been a fan of the show since the first season, and had asked Lange over drinks one night in New York to intervene on her behalf. "I said, 'Oh, God, talk to Ryan,” she recalled. “Tell him I'll do anything to be on the show!"

“The one thing I'll say about the part is, I wanted to see a lot of scenes with Jessica Lange and Kathy Bates going at it, so that's what you're going to get to see," Murphy teased.

"The title of the next year is American Horror Story: Coven," he continued. "It's a really cool story that we've been talking about for a couple of years no, and this seemed like the year to do it." The third season has been long rumored to center on witches.

The show, which had been filmed primarily on a soundstage, will be shot on location in different cities with rich haunted histories, including New Orleans.

As Murphy and Falchuk are also behind Fox’s musical dramedy Glee, it shouldn't have been surprising to see Lange perform her trippy song-and-dance version of "The Name Game" within the walls of Briarcliff Manor in Season 2. The actress, who had enjoyed the torch song her character performed earlier in the season, admitted she asked Murphy for another musical number. "What was the most fun about shooting it was all the inmates, how they really, really got into it. It was great fun to do," she said. "It's an odd song. It's not one of my favorites."

"She was so damn happy to get out of that [nun] habit," Murphy laughed.

Rabe's possessed Sister Mary Eunice also had a brief musical interlude, with her provocative version of "You Don't Own Me." The actress revealed that during shooting breaks, co-star Zachary Quinto (Star Trek) would play the banjo and she would play the guitar. "Zack was better at the banjo than I am at the guitar, for sure," she said. When Paulson was asked whether she participated in any of those sessions, she said, "I wasn't a musical breaker because I don't play any instruments."

"Sarah would actually come in and say: 'You suck. You're so bad!" Rabe teased.

"Zack with the banjo started to get irritating, quite frankly," Paulson joked, explaining that his song of choice was "The Rainbow Connection" from The Muppet Movie. "It was like every day, and I'm like, 'Shut-up with ‘The Rainbow Connection’!"

Conroy, who played the sad ghost Moira in Season 1, was transformed into the Angel of Death for Asylum. "It was lovely to kiss everybody," she laughed. "It was very nice."

Murphy described the concept for Conroy's dramatic costume as "Catherine Deneuve in The Hunger meets a Japanese designer meets Mildred Pierce. “We knew that we really, really wanted a different look for Franny than we had last year,” he said. “In fact, for all the characters so that was something that -- how do we do this different? How do we make these great actors look different than they did the previous year and we're doing that again for next year."

Grossman played fan-favorite Pepper, but the actress had no idea when she auditioned that her character, a microcephalic patient, would become so important. "When they first called me to do it, it was an itty-bitty little part," she said. "And when they asked me to shave my head, I thought, 'What is this?"

Moderator Denise Martin of New York magazine’s Vulture blog asked the cast if they were ever scared to open their scripts. "Yeah, every week you're terrified," replied Peters, whose character Kit Walker was caned, kidnapped by aliens and experimented on by a Nazi war criminal.

"There's a lot of really great DVD extras on this," Murphy teased about content that was ultimately cut. "The masturbator [character] got insane coverage during ‘The Name Game.’"

"That was a shame that that was hidden because that was pretty damn funny," Paulson said.

Falchuk spoke about the difference between producing a horror movie and a horror television series, noting that because the story is watched in people's homes, it warrants different handling.

"It does demand a little bit of compassion at the end because you fall in love with these characters in a different way than you would in a movie," he said. "If you want to kill everybody in a movie except one person, you can kind of get away with that, but if you're looking to do a horror TV show, you have a different responsibility to the characters because the audience has a different affection for them."

From the idea to the writing to the shooting of a season of American Horror Story, Murphy and company will work for close to a year. "We come up with story first and then we come up with the characters," he said. "It is a repertory company, so we'll move people around and sometimes there won't yet be a role for somebody. Like when we started this season, I really had no idea that Dylan [McDermott, one of Season 1’s stars] would be the person to play Sarah's son, but the deeper we got, I thought, that would work great."

Murphy told the appreciative crowd that he’s having so much fun creating the show that he’s spoken with FX Network President John Landgraf about perhaps creating a companion piece to American Horror Story. "I think it would be really cool to do a couple of different incarnations of the idea," he said.

American Horror Story: Coven premieres this fall on FX.