Let me rephrase: if you are not paying for it, you are the product, but you probably don't know it, and even if you did know it, you probably don't care.
If I was to go one step farther, I'd say the entire powerbase of companies like Facebook and Google is founded on a large mass of people not caring about their privacy. Maybe a step too far, but I'm not so sure.
Not so much not caring, but getting stuck in a vortext.
Free-to-use, privacy-voiding services kill any paid-for, privacy-respecting service. There's a race to the bottom -- Gresham's Law -- and the "good" services can neither gather sufficient users nor revenues to be sustaining.
The leaders, at the same time, have to stay ahead of all three fronts in the game:
1. They need low per-user costs to sustain themselves.
2. They need to exploit user data (or whatever other advertising-based edge) they have to retain advertisers.
3. They've got to retain sufficient network size and quality to keep smaller services from taking off, or from boiling-off the high-quality users who are no longer satisfied by the service.
Google launched G+ to kill Facebook. It failed in that, with a large number of arguments as to why.
But Facebook's initial attraction was that it was literally Harvard. That is: it began as one of the most selective, aspirational, and attractive (to both other participants, and advertisers) cohorts on the planet.
Metcalfe's Law is only so powerful, and it's a strong overstatement. There's both a falling value with additional nodes (Tilly-Odlyzko), and a per-user cost constant (myself). The size of a network is ultimately governed by that per-user cost.
(There is also, if you will a perverse T-O factor -- a subpopulation who are actively detracting from overall site value. This can be addressed by specifically addressing and neutralising those participants. The cost-constant isn't subject to this.)
Which is why a new social network could form, and relatively easily, among some sufficiently large appealing cohort. Throwing some funding money and support to individuals within such contexts might well take down Facebook, eventually.
(Though the replacement would almost certainly eventually present the same problem.)
I'd say you are probably right on this - it's interesting to consider how these companies actually function - sometimes the core product has been free - for a long time - and yet for services like YouTube - now there are paid options.
Can you imagine an internet search engine with a paid option? Perhaps a personal search assistant who sorts through all the junk to find what you are actually after? It may well happen.
As someone whose started a company with a "free product", seeing how it's been monetised has certainly been eye-opening.
If I was to go one step farther, I'd say the entire powerbase of companies like Facebook and Google is founded on a large mass of people not caring about their privacy. Maybe a step too far, but I'm not so sure.