Creating picture-in-picture with a shape?

Hi! I want to add a video clip over the top of a background, but instead of a sharp square, I want my clip to be in a circle or oval with softer edge. I’ve been exploring, but can’t find anything that seems to work!

Thanks for any ideas!

Is the background an image or a video (static or moving)?

I have done this with a static image background. I create a new background image in another application (like publisher or photoshop) with any green shape where I want the clip. Using this new image as the “background”, the green shape can be keyed out and your video clip can show from behind the “background” layer. We have gotten creative with fun borders around the video clip too!