App permissions

Which license do you use (pro, premium per user, premium capacity)?

When you add user to app audience, you can choose if the user should have permission to build content with the dataset.

If you check second option on image above, user will have access to dataset via desktop application and will be able to create reports based on it.
However, to create report based on dataset, this user needs to have pro license.

If you use premium capacity, user can have free license and will still be able to see report. However, with free license user will not be able to create report based on that dataset.
If you use pro license within shared capacity, user will need to have pro license to see report. And with pro license, user will be able to additionally create reports based on that dataset.

Cheers,
Nemanja Andic

Hi willatkinson,

When a user is added to a Power BI App's Audience, they may gain access to the underlying data, but that only depends upon the permissions that are set within the app and the underlying dataset. You can only share view/ read-only access to the app with the users. Or you may share BUILD access as well, in case you want users to be able to make reports using the underlying dataset. If you do not check any of the checkboxes shown in the below image, you will essentially be giving view-only access to your users.

Please refer to https://learn.microsoft.com/en-us/power-bi/collaborate-share/service-create-distribute-apps for more details

Coming to your other question regarding the requirement of a license for viewing reports - Yes, a Power BI license (PRO or PPU) is required to view reports on Power BI Service. 

But, if the report is hosted in Power BI Premium Capacity, users with free licenses will also be able to view the reports and apps shared with them. Your org will have to purchase a dedicated set of resources that can be used for hosting premium workspaces.

Please note that it differs from the Power BI Premium-per-user license, which includes all features that come with the Power BI PRO license, along with some AI capabilities and extra features. This does not support sharing reports with free users.

Please refer to the following community post where we discussed report sharing options in detail.

Do let us know if you have any questions.