A lot of those costs are actually borne by the distributors. Paizo and OBE handled the tech support and the customer service end of things.
Not all of it. As long as WOTC's name is on a product, people will call them with issues. And even if the response is "Ask Paizo or OBE", it still takes time, it still takes training, it still takes resources, and other overhead. Not as much as it does for a product your company is entirely servicing, but the number for those services is not zero.
Promotion and marketing is a cost that is easy to drop.
It's impossible to drop actually. The company structure is set up to report on all products that are represented in your sales. That means someone internally needs to create a list of all products, and tie them to the accounting numbers for those products. It's not as much marketing and promotion as a new product, but again there is overhead in marketing and promotion of all products for which you collect any revenue.
I'm not sure if it was WotC or OBE that put out the adds for the pdfs when the 4e ones first were available, but adds are an easy thing to not purchase.
I am not talking about advertising. I am talking about how internally the marketing department is responsible for tracking what products the company is selling (in any fashion) and listing those products in various places and dealing with any promotions related to those items. If you want for example a company-wide promotion for all products, you need to know what products that actually covers, and marketing deals with those issues typically.
I would find it a little incredible to think the costs of counting their incoming checks would be a significant added cost to them (I expect they already have accountants and such so these costs are marginally adding onto existing internal workloads instead of requiring from scratch overhead personnell), though I can easily see WotC feeling that the revenue from pdfs is small on their scale of things and therefore unimportant to them and easily sacrificed.
Yes, the employees are already there. For ALL products the employees are already there in accounting, marketing, and many other areas. That's why it is called overhead, and it is also why when two companies merge or one acquires the other, most of the "redundancies" are in those departments. There are some people and costs that cover issues for everything the company does, and if the company does less then cuts can be made in those people and costs over time.
Each product your company offers takes a portion of all overhead, right down to the electricity used by the company and the janitorial service. There are fairly standard formulas for calculating the cost of overhead. For example at my company, if a supplier sells us an item for $1.00, we calculate that the end cost to us will be around $3.00 after factoring in the overhead related to that product. So when we sell that product for $4.00, it might seem like that is some big rip-off given it cost us $1.00 originally. But realistically, we are only making a 33% profit on the item, which is not outrageous.
Anyway, it's not just counting incoming checks. There is a lot of tracking of all sorts of data that goes on behind the scenes, and it relates to all products. If you cut a product entirely, you save some of the overhead related to that product. If you cut a vendor or distributor, you save some money as well.
Which is why I say cutting the entire PDF line was probably more cost effective than trying to cut just the 4e PDF line while keeping open the non-4e PDF product lines. You'd effectively be spending almost the same amount of overhead on PDFs (it would be less, but not a lot less), all to support the least revenue-generating portion of the PDF sales (the non-4e portion).
