The correct option is D Were watching
Here, 'were watching' in past continuous tense is correct because it is used to
indicate uncompleted action in the past (with or without time reference).
'Watched' in past simple tense is incorrect because it
indicates an action that has already been completed.
'Has watched' in present perfect tense is incorrect
because it is used to indicate an action which started in the past and has continued
up untill now.
'Was watching' is incorrect because the subject (members) is in plural form, not singular form. So, usage of were is correct.