On the Money

Round the clock television for babies, courtesy of BabyFirst TV

Toddler TV as teacher

One enterprising cable channel is going after an unusual demographic: the diaper set.

BabyFirst TV is the first 24-hour network that creates original programming for babies as young as 6 months old. Yet the endeavor is a controversial one, as the American Academy of Pediatrics doesn't recommend any television viewing for children younger than 2.

Still, the company told CNBC's "On the Money" that one out of every three moms in America is letting their little one watch BabyFirst TV, and a lot of it: on average over 100 minutes a day.

"According to the Kaiser Family Foundation research, 97 percent of American babies are watching TV," pointed out co-founder Sharon Rechter. "So now the question, I think, is not so much should or shouldn't they. That train has kind of passed, but rather what are our children watching?" (Tweet this)

Read MoreNext frontier for 'Internet of Things': Babies

To watch, or not to watch?

E*Trade baby
Source: E*Trade | YouTube

New research appears to support the idea, at least in principle, of allowing children to indulge in television, especially against the backdrop of the explosive growth in streaming media, online games and mobile technology.

Recently, the University of Michigan found in a study that TV viewing among children is at an eight-year high. Children aren't the only culprits: the data also showed that more broadly, 51 percent of households have the TV on most of the time. Those trends that have only fueled BabyFirst TV's growth.

However, according to research from the Mayo Clinic, too much screen time for kids can actually lead to impaired academic performance as well as other adverse effects such as obesity, irregular sleep, behavioral problems and less time for play.

Since Rechter launched the network in 2006 with her co-founder, Guy Oranim, it's now in over 50 million homes in the U.S. distributed by major providers, including Comcast, DirecTV, Dish Networks and Time Warner Cable. BabyFirst's mobile application currently reaches 20 million to 30 million users, and the company offers content in both Spanish and English.

"Our programming is tailor made at BabyFirst for infants, toddlers and their parents," Rechter said. "We are there to hold mom and dad's hand in the first years and help them introduce their child to skills like math, vocabulary, art, but also questions like asking how and why do things work."

Read MoreBritain becomes first to legalize three-parent babies

Rechter cited a University of Wisconsin-Madison study that found positive learning outcomes of "Sesame Street" and maintained that it is possible for babies to learn valuable skills from television.

She insists that in order to be most effective, parents should use BabyFirst TV to engage with their children. The company reports that of its users, 90 percent watch BabyFirst TV with their infants.

"What's most important is that we encourage babies and parents to use BabyFirst as a tool to interact," Rechter said, who is also a mother of four.

"For example, if you see on BabyFirst a red ball bouncing, we would say to you as the parent with a subtitle, 'Ask your baby what color is the ball?,' " she said. "And that's why we see babies and parents engaging and learning together with BabyFirst."

BabyFirst TV wouldn't disclose its revenue but says they receive roughly 70 percent from cable, 20 percent from apps and 10 percent from online platforms such as Netflix and Amazon. It expects to be profitable by the end of the year.

However, included in the company's revenue mix is advertising, which represents another sticking point for parents and child advocates who object strongly to mass marketing at children.

"All of our advertising is targeting only the parents. We never target children with our ads," Rechter explained. "We only bring in sponsorships that we think are valuable to a mother in this journey."

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

On the Money airs on CNBC Sundays at 7:30 pm, or check listings for airtimes in local markets.