I am looking for a way to shape a layer of video playing on top of a background.

Ideally, I'd use a black and white gobo as my cutting tool. White would be set up as transparent in order to shape the outer edge of the video frame, and black would also be transparent in order to allow the background layer to show through. (While eliminating the unwanted video border from shaped layer)

It seems that this trick is halfway there, depending on which layer I want to see. Can I do this?