The proportion of cable subscriber homes to all television homes in an area. This figure is expressed as a percentage. For example, if cable television is in 50,000 households in a market, and the number of TV households in the same market is 450,000, the cable penetration is 11.1%.

Source:
http://www.nielsenmedia.com/glossary/
http://www.arbitron.com/downloads/terms_brochure.pdf