Complex sentence: Their immediate task was to record a hit single as the follow-up to "Positively 4th Street", but Dylan was already shaping his next album, the third one that year backed by rock musicians.
Split into simpler sentences: Their immediate task was to record a hit single as the follow-up to "Positively 4th Street". But Dylan was already trying to formulate the shape of his next album, the third he had begun that year backed by rock musicians.