Colourful bit of scenery drops -- sign the show's over (7)
I believe the answer is:
rainbow
'colourful bit of scenery' is the definition.
'drops sign the show's over' is the wordplay.
'drops' becomes 'rain' (I've seen this in other clues).
'sign the show's over' becomes 'bow' (performers bow at the end of a show).
'rain'+'bow'='RAINBOW'
(Other definitions for rainbow that I've seen before include "Water-colour production" , "display of colour" , "Colourful display" , "'The - - ' by D H Lawrence novel" , "Natural arch of colours" .)