We present an information-theoretic approach to obtain an estimate of the number of bits that can be hidden in compressed image sequences. We show how addition of the message signal in a suitable transform domain rather than the spatial domain can significantly increase the data hiding capacity. We compare the data hiding capacities achievable with different block transforms and show that the choice of the transform should depend on the robustness needed. While it is better to choose transforms with good energy compaction property (like DCT, Wavelet etc.) when the robustness required is low, transforms with poorer energy compaction property (like Hadamard or Hartley transform) are preferable choices for higher robustness requirements.