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Not long after winning multiple Oscars for “The Shape of Water,” Guillermo del Toro visited his hometown of Guadalajara, Mexico, where he discussed ways to support the local industry.

Aside from launching two programs for Mexican animation talent to attend either the world-class Gobelins School in Paris through an Animexico scholarship or any film school around the world with the Beca Jenkins-Del Toro scholarship, he brought his celebrated “Monsters” collection of paintings, drawings, maquettes and artifacts to his beloved city. Most importantly, he founded animation studio Taller del Chucho, with his alma mater, the University of Guadalajara, as the lead investor.

He chose seven people with extensive experience in animation — Rita Basulto, Sofía Carrillo, Karla Castañeda, René Castillo, León Fernández, Luis Téllez and Juan Medina — to help transform the Taller del Chucho into a world-class studio, train a new generation of talent and develop IP.

With this move, he came closer to realizing his goal to showcase Mexican talent to the world, arranging for some sequences of his stop-motion animated contender, “Guillermo del Toro’s Pinocchio,” to be realized at the new studio. “I thought it was really important for their artistry to be seen in a movie of this caliber,” he told Variety at the film’s AFI Fest premiere in November.

“We needed to segment a section [in the film’s production] that was important to be contained so we did the limbo chamber and the funeral procession of the black rabbits [at the Taller]. They created the puppets, the sets, they art directed, they did the cinematography and I had them animate the puppet Pinocchio as well as the cricket in one of the longest animation sequences in the entire movie, if not the longest,” he said.

“Animation has been my first love since I was a teenager. I taught stop-motion animation when I was in high school to kids younger than me,” he added.

“When you do a live-action movie, representation comes in the form of live flesh-and-blood actors but representation here came through the animation. One of the things we are doing that is not common is we are crediting the animators upfront in the main credits, right next to the voice actors,” he pointed out.

Estrella Araiza, director of the Guadalajara Film Festival and chair of Taller, also took on the unfamiliar role of production supervisor. “It was a steep learning curve for all of us,” she said of the 50-odd crew and three main puppeteers who worked on the sequences from late 2020 through part of 2022.

The Taller del Chucho holds a variety of workshops and courses, including those in 2022 on production design by Oscar-nominated Eugenio Caballero and audiovisual narration in animation by Carlos Carrera, director of the award-winning animated feature “Ana y Bruno.”

While Mexico is flush with animation talent, many of whom work on low-budget children’s series, films and advertising, the market has not been sustainable for large artistic projects, Araiza pointed out. The Taller del Chucho will hopefully change that.

According to Carrera, financing for “Ana y Bruno” fell apart twice before it came through, with a combination of public and private funding coordinated by “Instructions Not Included” producer Monica Lozano of Alebrije Prods. and Locoloco. Mexico’s Anima Studio, Itaca and Five 7 Media boarded as co-producers. 

“I am developing short films on my own dime but I also have two feature films in development, ‘Los 8 y la vaca’ which is storyboarded, and ‘Los huesos de la lagartija,’ which tells the story of the Conquest from a child’s point of view,” he says.

The financing process remains fraught. Government funding exists for animation but has been cut back due to the austerity measures of Mexico president Andres Manuel Lopez Obrador. 

“Independent animation production has suffered from the scarcity of funds but growth continues apace, thanks to the support of streaming platforms, but not everyone can get on them,” Lozano says. Del Toro had been trying to get his vision of the classic Italian fairy tale of Pinocchio off the ground for more than 14 years until Netflix stepped in.

Mexico’s most prominent animation company, Anima Studio, now celebrating its 20th year, released 22 animated features theatrically, but its 23rd, the sixth iteration of its “Las Leyendas” franchise — “Las Leyendas: El Origen” — debuted exclusively on ViX+, TelevisaUnivision’s subscription-based streaming platform. 

“The pandemic obliged us to change our distribution strategy,” says Anima’s executive VP, Jose Carlos Garcia de Letona.

The same can be said for the irreverent “Huevoscartoon” franchise founded in 2001 by the Riva Palacio family and Carlos Zepeda. After scoring big in the box office with its first four pics, the fifth and final feature of the franchise, “Huevitos congelados,” streams exclusively on ViX+.

In June, HBO Max Latin America announced an exciting new take on its Batman franchise with “Batman Azteca: choque de imperios” (“Aztec Batman: Clash of Empires”), the inaugural collaboration with Warner Bros. Animation, Particular Crowd, Anima Studio and “Book of Life” producer Chatrone.

The feature will be produced entirely in Mexico and feature top local talent, including Omar Chaparro (“No manches Frida”) as the Joker, Alvaro Morte (“Money Heist”) as Two-Face and Horacio Garcia Rojas (“Narcos: Mexico”) as the Dark Knight.

Anima Studio has made two Spanish-language animation series for Netflix so far. With studios in Mexico City as well as Las Palmas de Gran Canaria and Madrid in Spain, where it taps generous incentives, the company is currently producing three features and two series, including pre-school series “Brave Bunnies,” in co-production with Ukraine’s Glowberry. With the marketplace consolidating even further and fewer players to sell to, the key is to generate more franchises and continue to diversify, says Garcia de Letona.

Limited state support is one of the reasons why Pixelatl festival founder Jose Iñesta launched the annual event that seeks to showcase Mexico’s animation, comic and videogame industries. A slew of notable projects has emerged from Pixelatl, which offers training, recruitment and a market where screenings and pitches are held, Iñesta says. 

“This is the reason why HBO Max, Discovery Kids, Netflix, Cartoon Network and others come as they know they can find valuable, internationally appealing content for their audiences,” he says. 

The Ambriz brothers’ Cinema Fantasma sold stop-motion musical series “Frankelda’s Book of Spooks” to HBO Max Latin America at Pixelatl and is now working on its first stop-motion animated feature, “Ballad of the Phoenix,” with Gael Garcia Bernal lending his voice in both Spanish and English. Co-director Roy Ambriz and producer Marta Hernaiz were at the Annecy Animation Festival last year to present the project, seeking more partners. This year, Mexico will be the guest country at Annecy where some 50 Mexican animation pros will be attending, says Iñesta.

While at Annecy, Ambriz spoke of del Toro’s inspiring support and the fact that he mentored and co-financed their first medium-length stop-motion film, “Revoltoso” (Rebellious).

 “Animation is a highly collaborative medium and it’s the spirit of community that has driven its growth in Mexico,” Iñesta says.