The only _sensible_ thing you can do if the transmitter won't stop is to ignore them, and thus drop packets, yes.
Queueing them up instead makes some artificial benchmark numbers look good but is a horrible end user experience, so you should never do this, but lots of crap home WiFi type gear does.
So, as I said, bandwidth limits and delay are different. The canonical "station wagon full of tapes" is illustrative, it has _tremendous_ bandwidth but _enormous_ delays. In contrast a mid-century POTS telephone call from London to Glasgow has almost no delay (barely worse than the speed of light) but bandwidth is tightly constrained.
I would far rather my udp packet is delayed by a millisecond than dropped.
I have an RTP stream running from India to Europe at the moment, 3000 packets per millisecond, so 0.33ms between pacekts. Typical maximum interpacket delay is under 1.5ms, looking at the last 400,000 seconds of logs, 200k are 1-2ms, 170k are 0-1ms, and about 4-5k on the 2-3ms gap, 3-4ms gape, etc. Less than 1% does interpacket delay increase past 10ms.
Standard SMPTE FEC doesn't allow more than 20 columns of error correction, at 30mbit that's about 7ms of drop, at best of times (assuming the required FEC packets aren't lost as well). At low bitrates it works better, and the majority of our international vision circuits rely on single streams with FEC. Had one ISP in the Ukraine that had an intermittent fault where, regardless of the bitrate, they would occasionally drop 170ms of traffic.
I currently have a difficult provision that for a variety of reasons I can't use ARQ on. To keep the service working I have 4 streams going, over two routes, with timeshifting on the streams to cope with route-change outages that tend to sit in the 20ms range. FEC is meaningless at these bitrates.
RTP is fine for delay and re-orders, but it doesn't cope with drops. I was at a manufacturer's earlier this week and said that I've experienced dual streaming skew of over 250ms (we had one circuit presumably reroute via the US), and I laugh at their 150ms buffer. Dual streaming can still fail when you have both streams runnning on the same submarine cable though. Trust me, intercontinental low latency interoprable broadcast IP on a budget isn't trivial
If you are running over UDP, that is so that packets get dropped while preserving the overall "stream". That is actually the purpose for the design of RTP over UDP.
You realise that streams can't cope if packets are lost -- how badly they are affected depends on how many packets are lost and which packets they are, in some cases a single lost packet can cause actual on-air glitches
The need to protect against this type of problems is the reason for which Forward Error Correction is included in almost all the codecs.
Moreover, since your specific use case is not interactive conferencing, but IPTV, there would be no problem in incrementing even more the FEC ratio, at the cost of a small decoding latency.
Standard SMPTE 2022-1 FEC does not cope with real world network problems, that's why we have things like 2022-7, but even then that struggles in the real world.
And yes, this use case is interactive conferencing, where we aim to keep round trip delay from Europe to Australia down below 1 second.
