This is very similiar to how i pictured it, and netflix are doing something similiar.
However instead of having a set list like you have suggested i would simply call it Watch Together
Once you select Watch Together you should then be taken to a screen to select the 'Host' user (the one who would control the library access) and any secondary viewers. If the primary had a password then ask for it and login
I've done a mock up below - notice disabling so there is only one host and the host can not also be a spectator.
This looks great good idea and worked out in to a picture example
+1 for this!
Edited by miniliQuid, 07 April 2020 - 05:58 AM.