This is separate from YouTube itself tracking who watches the video, and for how long (and if they skip any), and if they watch any ads, and then giving a bit of money to the creator for the ad views.
See audienceWatchRatio under https://developers.google.com/youtube/analytics/metrics
Example: "A one-minute video is watched 100 times. Half of the viewers stop watching after 15 seconds and the rest watch the entire video. None of the viewers watch any parts of the video more than once. In this case, this metric's value would be 1 for time buckets in the first quarter of the video, and its value would be 0.50 for the remainder of the video."
So someone could ask for ratios before, after, and during the ad segment to see if it's worth sponsoring them again. On average they can tell how many people skip the segment, how many stop watching entirely, etc. You can also see this on the UI where it shows peaks above the timeline with other users clicking past sponsored content.
Why do I need the app for anyway?
Most people don't do this.
> Basically you want people creating videos for free?
Noone "wants" anything here. It's just more convenient.