Some of the data itself is from the public record, but compiling all of it yourself would be prohibitively expensive. It would take many trips to various libraries, churches, courthouses, etc. in lots of far-flung places in different cities, states, and countries. And that's all before you start indexing, searching, copying, or scanning any records.
Then consider they're hosting all those billions of records, have developed decent software for both building family trees and documenting them with their database of sources, and continually improve their software and increase their database holdings. The only reason they can charge so little is the economy of scale based on their huge userbase.
Look again. I said I thought it was reasonable for them to charge something for the service of having collected, scanned, indexed and hosted the data. What I did imply was that I thought the charge was excessive for what they're doing. What you may not realize is that much of the work done to transcribe and index the data is done by volunteer labor, people who do it for the love of genealogy, or to help make data available, or because they then get some level of free access to it in recompense. It's not like Ancestry is paying people salary to do most of that work.
They incur expense in collecting each piece of data once. There is some small ongoing expense for hosting it, making it available, but they collect revenue for this endlessly on the same data. They're making sufficient profit to be able to buy out other companies on the market (most recently, Footnote.com was picked up) so I can reasonably assume they're fairly flush with cash.
It would be much more expensive to me to travel or snail mail to all of the places that hold data I am looking for, I'll grant. However, Ancestry's fees are high enough that I still can't afford to maintain a subscription, so the data is lost to me anyway. Couple that with my local Library's subscription to HeritageQuest database, which contains some of the same data sources, and now Ancestry gets no money from me at all instead of what they might get if the fees were lower. Yes, I miss some of what they have available that other sources do not, but this is a hobby, after all.
Actually, just creating and editing your family tree on Ancestry is completely free [custhelp.com]. And there's no limit to the number of people, AFAIK. The paid service is just for accessing their database of sources and connecting with other users who might have overlapping family trees.
Creating and editing the tree might be free, but Ancestry.com's whole appeal lies in the huge range of data they house, much of it gleaned from public records. I'm not against them charging some for the service of having scanned and indexed that data, and for operating the servers to host it, but in my opinion they're overcharging for that service based on our public data by a fair margin.
Frankly, it is, but for a rank beginner it lets them get in and figure out if the software and system will work for them for free. The first paid level ups that to 2500 people.
I started with MyHeritage back when it first came out. It was completely free for several years, and I got a pretty large database going before they moved to fee-based. So I'm stuck. I like their software, and the services they have are worthwhile in my experience. When I can afford it, I'll pony up the money to keep going. My data is still there, just no one can access any more than 250 people. The software on my PC still works fine and I have local access to the full database, in fact I can keep adding to it.
I would recommend it even though the service is now fee-based.
Hey OP, if all you found was addresses on Ancestry.com, then you're not making any effort to find information. They do have metric boatloads of data of all sorts for your money, but you do have to have a clue about finding it, and make the effort.
That said, I do agree Ancestry.com is a pricey service. Check out MyHeritage.com. You can do a free 250-person tree, or add more with payment. The software is a free download and use, and is pretty thorough. The online piece includes the ability to match to other people's trees and import their data to your tree.
"All the people are so happy now, their heads are caving in. I'm glad they are a snowman with protective rubber skin" -- They Might Be Giants