A group of girls react to a live actor character at the "13th Floor" haunted house in Denver October 18, 2013. REUTERS/Rick Wilking PHILADELPHIA (Reuters) - Ed Terebus was an 18-year-old high school student when he and his big brother Jim, a laid-off auto worker, decided to build their first haunted house 34 years ago.

The Terebus brothers charged visitors $1.50 per head to tour their creation, which was set up in a trailer and featured actors wearing makeup of egg yolks mixed with oatmeal. Over the decades, their modest production grew into Pontiac, Michigan's four-story Erebus, which the Guinness Book of World Records listed as the world's largest haunted attraction from 2005 through 2009, when it was overtaken by a larger thrill in Texas.

Today, Erebus manufactures fear with features such as animatronic mutant gorillas and a shifting wall that pushes visitors into what appears to be a bottomless pit.

But what frightens the Terebus brothers the most is the staff it takes to run the place.

"I have an IT guy here full time now," Ed Terebus said. "That's the scary part."

Haunted house operators have borrowed heavily from Hollywood, using programmable controllers, modern computer graphics and professional make-up artists to create increasingly vivid and horrific thrills.

And business is booming.

America's Haunts, a trade association, estimates there are 1,200 large-scale, for-profit haunted attractions in the U.S. plus another 3,000 haunted houses operated by charities that open for only a day or two every year. The commercial attractions collectively bring in from $300 million to $500 million annually.

"Haunted houses are trying to create these immersive environments, and technology often does that," said Brett Bertolino, director of operations at Eastern State Penitentiary, a decommissioned Philadelphia prison converted annually into a giant, sometimes claustrophobic, haunted house.

Technology has helped drive change, making it easier for operators to devise new thrills as well as to share ideas around the country.

"People my age grew up going to these and started thinking, 'Wouldn't it be great if we could do this for a living?'" said Scott Simmons, the 43-year-old co-owner and creative director of Pittsburgh's ScareHouse.

"The Internet allowed all of us to connect," he said. "I'm in Pittsburgh and could connect with someone in Texas."

Haunts began getting more complicated about 15 years ago, when the price of air-powered pneumatic devices dropped, Simmons said. That allowed operators to easily build moving props - from floors that shift under patrons' feet to monsters with moving mouths and limbs.

To make the monsters a little less predictable, operators combined air-powered devices with computerized sensors.

"They aren't on timers where something is going ka-junk, then 30 seconds later, ka-junk," says Billy Messina, a co-owner of Netherworld, an Atlanta haunted house known for its innovative use of silicone masks on actors to create extremely realistic monsters.

"With the sensors, you can time it so it's not always the person at the front of a group that's getting scared," he said.

GRABBED BY A GIANT CLAM

The older animatronics - with their overly mechanical movements and hinged jaws - have given way to puppets.

Gore Galore, a maker of props for haunted houses, sells a puppet that looks like a toothed clam. Its jaws, which can entrap as many as four people, are so huge the operator must rely on a video camera inside the prop to see the patrons.

"Bigger is always better," said Kevin Alvey, Gore Galore's owner.

Haunted house operators have also followed Hollywood's lead in using computer graphics, mounting flat-panel video screens in place of windows filled with scenes of zombies or using them as paintings whose subjects can move and age visibly.

These advances are not cheap, and they have created an arms race of sorts to provide bigger and better thrills.

"A couple of years ago, we had a 13-foot (4-meter) steampunk robot with machine guns," said ScareHouse's Simmons. "Once you establish that you are willing to have that, you can't go back."

The most sophisticated businesses own their buildings and employ year-round, full-time staff - including effects artists, mechanical engineers and, in the weeks leading up to Halloween, hundreds of actors. Despite the costs, a business might be open to the public for only 30 days of the year.

That brief time-frame to recoup a year-long investment has created fierce competition and a surge in ticket prices.

The average ticket price for a haunted house is $15, but it can go as high as $65, according to America's Haunts, whose members include the nation's largest haunted houses.

(Editing by Scott Malone and Gunna Dickson)