There is very little information about the back-end of Youtube (provided by a company called audible magic), which watermarks content to screen for copyright violation. But there's an interesting snippet by Viacom's general counsel.
Fricklas points to the recent MTV music awards, where Kanye West rushed the stage, grabbed the mic, and delivered his Internet-meme-producing-line, "I'mma let you finish, but…" Viacom quickly uploaded the evening's footage into the content recognition engines of sites like YouTube, which can then block exact uploads of the same footage or allow rightsholders to monetize it with ads. Viacom used the tool to block copies of the clip, but not without offering a solution of its own: the clip was hosted on Viacom websites and was embeddable and linkable.
It also points to a more flexible strategie: Block exact copies, earn money from other people's mash-ups (who themselves don't earn money).
Source: Ars Technica,Viacom's top lawyer: suing P2P users "felt like terrorism" November 16, 2009