Since when is Silverlight a video format? Or are you refering to VC-1 which Silverlight is using? In that case my question would be: Since when is VC-1 proriertary?
It is a format used to display video, therefore it is a video format.
Proprietary \Pro*pri"e*ta*ry\, a. [L. proprietarius.]
Belonging, or pertaining, to a proprietor; considered as
property; owned; as, proprietary medicine.
[1913 Webster]
Why did you mention VC1 in particular? VC1 and most video formats are proprietary - theroa ogg being the exception. They, or rather the codecs they use are protected by patents on the encryption, so you have to pay for the right to use it. In the case of most video formats the creator of the format is who the money is collected from, or whoever pays for software the player is bundled with. Like IE and Firefox, the player is usually free because if they charge end users for it, that would reduce their uptake, and hence their income. Lock-in to proprietary video codecs (and DRM) are also being used as an anti-competition measure - for example Microsoft was fined $1billion fairly recently for anti-competitive practices with regard to bundling of video players. If video codecs and formats were open standards (like HTML) which anyone can use without restriction or payment of royalties, instead of proprietary ones, then we wouldn't have all this incompatibility and vendor lock-in push that we are seeing from everybody in the market.
Silverlight is a Microsoft only proprietary format, which I believe has both secret bits, and bits which are protected by patents. Incidentally VC1, Mpeg, AVC etc. are all proprietary - or at least different parts are proprietary to different companies since many companies own patents to different bits of the codecs. While this is better than a single company proprietary product since it is less likely to be used for anti-competitive lock-in, it is still a problem, because it increases cost - for example a DVD player hardware costs $25 to manufacture but the licensing of codecs required to play DVDs add an extra $25 to the price of a DVD player. Also you still get groupings pushing different formats in the hope of making a killing on royalties later if their format is successful. The result is a whole load of mutually incompatible formats which are forced onto the customer.
Adobe Flash is also proprietary, and I would dearly like to see an libre open standard version to replace it, however it is better than Silverlight because at least it is OS neutral. Microsoft will definitely use Silverlight to try to lock out other OSes and possibly even Google/Youtube, who they are hoping to challenge.
