Once upon a time, the now-defunct Redbook Magazine was a key market for short fiction, especially from women writers. In a given week, Redbook received more than 42,000 submissions. They published only 12 a year so the market for short fiction has always been tight.
I think if you can successfully write short fiction, then you hone the skills that will serve you well in writing long fiction even though there is more distinguishing the two forms than mere length.
If you like the short fiction form, reading it, writing it, or both, you've probably wondered where are the markets? I wish I could list ten markets for short fiction that pay well, but I can't.
Short fiction has been dying out in print for the last couple of decades. Sometimes romance publishers produce anthologies of novellas, much longer than the typical short story, from multiple authors, but for the most part, you just don't see short fiction in print publications.
Online markets do publish short fiction, but the quality is uneven, and the pay isn't enough to tempt most pro writers into spending the numerous hours needed to craft the little gem that short fiction should be.
So what's a writer who likes the short fiction form to do?
In my case, as a pro freelance writer and a published novelist, I try to create my own markets. I write a lot of web content using fiction techniques. These little articles, told from the viewpoint of a character I've created, put the point across while entertaining. I liken them to a really good commercial you might see on television that captures your attention so much that you don't flip channels during the breaks.
I've also created an original series for a client's e-newsletter with a new short story each month. The series started in September 2007 and runs through August 2008 and has the premise "pay it forward."
I've loved writing this connected 12 month short fiction series. Sure, the client's product is an integral, though subtle, element in each story, but the story has all the elements good short fiction should have. I'm proud of it, and equally proud of the client's reaction to each month's story.
Take-away truth: sometimes, when there's little demand for a particular form of writing, you have to create your own market.