The royal family keeps those tabloid papers going. Those tabloid papers are firms that pay taxes on their revenues and employ people who have turds for brains; people who would otherwise be unemployed.
The royal family is a big part of British tourism. The queen's face is on every mug, shirt and thong in the land. Only a living person can have such an effect. That is exactly why the french don't have Marie Antoinette on their underpants.
People actually come to see the changing of the guard from across the world( its sad, i know). And no, if the royal family did not exist the whole grand image of Britain would not exist which would affect tourism. Buckingham palace, Windsor castle are reminders of a living albeit inactive monarchy and hence have such appeal for tourists.
Monarchy at 66p per person is profitable.