Content ID is YouTube’s digital fingerprinting tool which allows rights holders and content administrators to manage their content at scale. This allows rights holders and distributors to deliver references of intellectual property (sound recordings, compositions and video assets)
Content ID administrators have the ability to either monetise, track or block third party uploads that use the content they have delivered. They can also whitelist particular channels, release claims and set customised policies for particular assets (like routing claims to be manually reviewed)
When a new reference is uploaded, any future videos are claimed automatically as per the policy set by the administrator. Content ID also performs legacy scans, to detect content uploaded before the reference file was provided to YouTube.
Think of Content ID as a watchdog that's constantly sniffing for any 3rd party use of your work. If it recognises that a 3rd party is using your material in their video channel, then that video will in most cases be automatically monetised on your behalf.
Content ID’s automatic matching typically picks up matches for music content that use 15 seconds or more of the reference file provided by your administrator. Over the past few years, YouTube has made a lot of improvements to Content ID — ensuring that most edited or altered versions of content are mostly all detected automatically.