We present an information-theoretic approach to obtain an estimate of the number of bits that can be hidden in still images, or, the capacity of the data-hiding channel. We show how the addition of the message signal or signature in a suitable transform domain rather than the spatial domain can significantly increase the channel capacity. Most of the state-of-the-art schemes developed thus far for data-hiding have embedded bits in some transform domain, as it has always been implicitly understood that a decomposition would help. In this paper we compare the achievable data-hiding capacities for different decompositions like DCT, Hartley, Hadamard, and subband transforms. We show that transforms with inferior energy compaction property like Hartley and Hadamard are better choices for the decomposition, than transforms with good energy-compaction property, like DCT or subband transforms.
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