Not to rain on the "puppets have rights, too!" parade, but I agree with Matel and Sesame Street. For 3 (yes, 3!) reasons :1. They produce shows (toys) for kids. Shows or toys that do not contain one tiny bit of sexuality, because they're aimed at kids 3 to 9 years-old, who shouldn't be in contact with sexual content. Okay, Barbie's sexy, but do kids notice her sexuality? No. They notice she's pretty, they wanna be pretty too.
2. The characters are copyrighted material. Showing such a movie (and making money from it) clearly enfringes those rights (yeah, I swear!).
3. They have an image to keep. Not a "anti-lesbian/gay/trans death to all homosexuals" image. A "we're a kids show made for kids" image. Btvs has an image as well. If a parody was to come out where Willow or Tara suddenly becomes nymphomaniac and starts sleeping around with pizza delivery guys, golf caddies and male gynecologists, Joss, and us, wouldn't like it.
I think we're getting much too sensitive as a community. Yes, there are prejudices to fight, there are a lot of issues that need to be resolved, lots of rights need to be respected. But this is not one of them.
Nowhere in their response did the companies mention gay or straight. As a matter of fact, they went out of their way to mention puppets don't have sexual orientations...
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Tara: No, see, 'cause your insect reflection represents your insignificance... in terms of the karmic cycle.